KUALA LUMPUR: Malaysian palm oil futures firmed on Tuesday, supported by fears of weak production, but prices were stuck in a tight range ahead of a long weekend as investors weighed sluggish export demand.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 9 ringgit, or 0.23%, to 3,861 ringgit ($892.72) a tonne by the midday break.

The market is trapped in a tight range ahead of the Chinese New Year holiday next week, a Kuala Lumpur-based trader said.

Palm oil received support from tight supplies as some planters estimated an 11%-15% fall in Jan. 1-15 production from the month before, but the upside was limited by lower exports, weakness in crude oil prices and record soybean crop in Brazil, the trader said.

Exports of Malaysian palm oil products for Jan. 1-15 fell 28.5% to 453,771 tonnes from 634,618 tonnes shipped during Dec. 1-15, cargo surveyor Societe Generale de Surveillance said.

Meanwhile, Dalian’s most-active soyoil contract gained 0.4%, while its palm oil contract rose 0.2%. Soyoil prices on the Chicago Board of Trade were down 0.4%.

Palm oil falls for second week on firmer ringgit

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

The ringgit, palm’s currency of trade, fell 0.3% against the dollar, making the commodity cheaper for buyers holding foreign currency.

Oil prices were mixed after China posted its weakest economic growth in nearly half a century, while its late-2022 U-turn in COVID policy still supported hopes of recovery in the country’s fuel demand this year.

Weaker crude oil futures make palm a less attractive option as biodiesel feedstock.

Bursa Malaysia will be closed on Jan. 23 and 24 for the Chinese New Year holidays.