JAKARTA: Malaysian palm oil futures closed up on Thursday for a sixth straight session, with gains in rival oils supporting the market.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange increased 39 ringgit, or 1.04%, to 3,796 ringgit ($817.40) a metric ton at the close.
“Strength in rival oilseeds has supported the palm oil rally for the sixth continuous day. Morning selling interest pressured prices before a recovery in rival oilseeds made prices revisit the psychological level of 3,800 ringgit,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract rose 0.51% and its palm oil contract increased 1.37%. Soyoil prices on the Chicago Board of Trade rose 1.08%.
Palm ends up after Malaysia stockpile hits a four-month low
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil prices are likely to rise to 4,000 ringgit ($862.07) per metric ton by the third quarter of this year, an executive of consultancy Glenauk Economics said on Thursday.
Malaysian palm oil output is set to improve this year as a labour shortage eases, although challenges remain as planters seek to comply with European and U.S. regulations targeting the sector’s alleged links to deforestation and forced labour, industry officials said at a seminar on Thursday.
Data from the Malaysian Palm Oil Board on Wednesday showed that inventories fell 4.64% month-on-month to 2.29 million metric tons as of December-end, the lowest since August.
Meanwhile, exports of Malaysian palm oil products for the Jan. 1-10 period fell 9.8% to 349,075 tons from a month earlier, independent inspection company AmSpec Agri Malaysia said on Wednesday.
Cargo surveyor Intertek Testing Services estimated exports of Malaysian palm oil products fell 3.9% to 354,465 metric tons.
Indonesia in 2023 approved replanting of 53,012 hectares (130,995.5 acres) of palm oil trees on land owned by smallholder farmers under a subsidised programme, data from the country’s palm oil funding agency showed on Wednesday.
Oil prices ticked higher as markets measured rising tensions in the Middle East against a surprise build in U.S. crude stockpiles.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.