VEGOILS-Palm oil futures rise for fourth day on Chinese demand, higher export
SINGAPORE, Oct 17 (Reuters) – Malaysian palm oil futures rose on Tuesday to a near three-week high on stronger exports and Chinese demand, although easing crude oil prices capped gains.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange rose 19 ringgit, or 0.5%, to 3,799 ringgit ($802.83) a metric ton at midday trade, on course for a fourth consecutive session of gains.
Exports of Malaysian palm oil products for Oct. 1-Oct. 15 rose 5.6% from Sept. 1-Sept. 15, independent inspection company AmSpec Agri Malaysia said on Sunday.
Another cargo surveyor Intertek Testing Services said that exports rose 7.3%.
Malaysia has maintained its November export tax for crude palm oil at 8% and lowered its reference price, a circular on the Malaysian Palm Oil Board website showed on Tuesday.
Major importer China’s active purchasing for reserve restocking has also contributed to price increases, said Mitesh Saiya, trading manager for Kantilal Laxmichand & Company Mumbai.
However, there is a note of caution as the winter season approaches as palm oil consumption is expected to decrease, he said. Palm oil crystalises and turns cloudy in the cold, which affects the perception of oil quality and consumption.
Dalian’s most-active soyoil contract DBYcv1 rose 0.6%, while its palm oil contract DCPcv1 was up 0.1%. Soyoil prices on the Chicago Board of Trade BOcv1 rose 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Further underpinning prices, Southern Peninsular Palm Oil Millers Association data showed production in the first half of October fell by 0.73% month-on-month, LSEG Agriculture Research said in a note late Monday.
Oil prices fell slightly on Tuesday after a more than $1 slide on Monday amid hopes the United States would ease sanctions on producer Venezuela and as Washington stepped up efforts to prevent an escalation of the Middle East violence. O/R
Weaker crude makes palm a less attractive option for biodiesel feedstock.
($1 = 4.7320 ringgit)
(Reporting by Ashley Fang; Editing by Sohini Goswami)
((ashley.fang@thomsonreuters.com))
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