Palm trades in tight range as soyoil spread weighs
Malaysian palm oil futures were slightly higher Wednesday, supported by stronger exports and firm soybean oil prices, but narrowing spreads with soyoil limited gains. December contracts rose 7 ringgit to 4,350/ton. Analysts expect prices could reach 5,500 ringgit by early 2026 amid rising Indonesian biodiesel demand, while EU anti-deforestation rules face delays.
KUALA LUMPUR: Malaysian palm oil futures were range-bound on Wednesday, as stronger exports and firmer soyoil supported the market, but palm oil losing competitive advantage over soyoil weighed.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 7 ringgit, or 0.16%, to 4,350 ringgit ($1,036.21) a metric ton at the midday break.
The contract fell 2.25% on Tuesday.
Crude palm oil futures traded marginally higher on strong export performance and higher Chicago soybean oil prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“The narrowing spread between palm oil and soybean oil is also weighing on palm oil price gains.”
Cargo surveyors estimated exports of Malaysian palm oil products for September 1-20 to have risen between 8.3% and 8.7% month-on-month.
Dalian’s most-active soyoil contract fell 0.34%, while its palm oil contract added 0.04%.
Soyoil prices on the Chicago Board of Trade gained 0.12%. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices rose for a second straight day as an industry report showed US crude inventories declined last week, amplifying concerns of tightening supplies. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Malaysian palm oil futures are likely to jump 27% to a more than three-year high of 5,500 ringgit per ton in January-March 2026, as rising biodiesel consumption in top producer Indonesia tightens supplies, industry analyst Dorab Mistry said.
The European Union will delay launching its anti-deforestation law for a second time, postponing for another year the ban on imports of commodities such as palm oil that are linked to forest destruction.
Palm oil may extend gains into 4,401-4,429 ringgit per ton, following its stabilisation around a support zone of 4,274-4,309 ringgit, Reuters technical analyst Wang Tao said.
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Source : Business Recorder
