KUALA LUMPUR: Malaysian palm oil futures climbed for a second session on Wednesday, underpinned by strength in rival edible oils, although low trading volumes weighed on the market.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 19 ringgit, or 0.50%, to 3,782 ringgit ($816.85) by midday.
However, trading was lackluster and sideways between 3,775 ringgit to 3,785 ringgit, a Kuala Lumpur-based trader said. “Trading was thin as most players are still on holiday.” Dalian’s most-active soyoil contract ticked up 1.05%, while its palm oil contract rose 1.09%.
Soyoil prices on the Chicago Board of Trade were up 0.19%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices were little changed on Wednesday as investors monitored Red Sea developments, with some major shippers resuming passage through the area despite continued attacks and broader Middle East tensions.
O/R Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit rose 0.09% against the dollar, making the commodity more expensive for buyers holding foreign currency.
Exports of Malaysian palm oil products from Dec. 1-25 were estimated to be down between 4% and 16% from the previous month, according to data from surveyors Intertek Testing Services and AmSpec Agri Malaysia.
Malaysia maintained its January export tax for crude palm oil at 8% and raised its reference price, according to a circular on the Malaysian Palm Oil Board website.
Palm oil may bounce further towards a range of 3,813-3,819 ringgit per metric ton, driven by a wave e, Reuters technical analyst Wang Tao said.