KUALA LUMPUR: Malaysian palm oil futures ended higher on Monday for a second straight session, as cargo surveyor data showing robust exports and Indonesia’s mandatory biodiesel blending lifted investor sentiment.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 21 ringgit, or 0.46 percent, to 4,589 ringgit (USD1,128.91) a metric ton at the close.
Strong June exports have supported the market, while Indonesia’s mandatory minimum inclusion policy under the B50 mandate strengthened it further, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari.
Indonesia is scheduled to launch its B50 biodiesel programme, blending 50 percent palm oil-based biodiesel with 50 percent conventional diesel, on July 1.
Cargo surveyors estimated that exports of Malaysian palm oil products during June 1 to June 25 rose between 10.6 percent and 11.1 percent from a month earlier. They are expected to release their estimates for the full month on Tuesday.
“Production in Peninsular Malaysia is also experiencing a better-than-expected recovery, although East Malaysia is still recording lower output. Weather conditions remain benign and are expected to remain so, probably to the third quarter of the year,” Supramaniam said.
Supramaniam also said he expects prices to remain largely range-bound, at least until the release of the Malaysian Palm Oil Board report on July 10.
Dalian’s most-active soyoil contract rose 0.65 percent, while its palm oil contract gained 1.26 percent. Soyoil prices on the Chicago Board of Trade were up 0.49 percent.