Palm oil extends winning streak on output concerns
Malaysian palm oil futures rose 1.31% to 4,797 ringgit/ton, driven by production concerns and higher Chicago soyoil prices. However, easing South American soyoil capped recovery. Investors anticipate demand during Ramadan and Lunar New Year. Strengthened crude oil prices support palm oil’s biodiesel appeal, while a stronger ringgit makes it pricier for foreign buyers. EU palm oil imports fell 18% year-on-year, while soybean imports rose 7%.
KUALA LUMPUR: Malaysian palm oil futures ended higher on Wednesday, extending a three-day winning streak, underpinned by production concerns in the country.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 62 ringgit, or 1.31%, to 4,797 ringgit ($1,080.41) per metric ton at the close.
Crude palm oil futures were seen trading sideways to upwards following sharply higher overnight Chicago soyoil futures, but the easing of South American soyoil has seen the recovery capped, said Anilkumar Bagani, research head at Sunvin Group.
Separately, a Mumbai-based trader said production in Malaysia is not picking up and investors are waiting for demand to resume in the festive months of Ramadan and Lunar New Year.
Dalian’s most-active soyoil contract rose 0.65%, while its palm oil contract added 1.67%. Soyoil prices on the Chicago Board of Trade fell 0.59%.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices held steady as markets evaluated a ceasefire deal between Israel and Hezbollah while also anticipating Sunday’s OPEC+ meeting, where the group could delay a planned increase in oil output.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.34% against the US dollar, making the commodity more expensive for buyers holding foreign currencies.
European Union soybean imports in the 2024-25 season, which began in July, had reached 4.95 million metric tons by Nov. 24, up 7% from 4.62 million tons a year earlier, while EU palm oil imports totalled 1.26 million tons, down 18% from year-ago 1.54 million tons, European Commission data showed.
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Source Link : Business Recorder
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