Malaysian palm oil futures closed Monday up more than 1%

According to David Ng, a trader at Iceberg X in Kuala Lumpur, palm oil prices closed higher, following gains in crude oil and soybean oil markets. Ng notes that prices are supported by expectations of further inventory draws throughout the month. He forecasts palm oil prices to strengthen above 4,550 ringgit per tonne and face resistance at 4,680 ringgit per tonne.

Malaysian palm oil futures closed higher on Monday, boosted by optimism surrounding Malaysia’s plans to increase mandatory biodiesel use and higher soybean oil prices in Chicago.

The benchmark FCPO1 palm oil contract for July delivery on Bursa Malaysia rose 50 ringgit, or 1.09%, to 4,620 ringgit (US$1,169.62) per metric ton at the close of trading.

According to Anilkumar Bagani, head of commodity research at Sunvin Group, a Mumbai-based brokerage, palm oil contracts rose, supported by news of biodiesel production in Malaysia and a recovery in soybean oil futures on the Chicago Board of Trade.

Malaysia’s Deputy Prime Minister said the country will begin producing biodiesel with 15% palm oil in June in an attempt to lower diesel prices. He added that the increase in palm oil content will be phased, with the goal of reaching 20% ​​and possibly approaching 50% over the next two to three years.

Soybean oil prices on the Chicago Mercantile Exchange rose 0.36%. The Dalian Commodity Exchange was closed for a holiday and will resume trading on May 6.

Palm oil prices are tracking those of competing edible oils as it fights for share in the global vegetable oil market.

Oil prices rose 1%, reversing earlier losses, helped by the lack of a peace agreement between the US and Iran, despite US statements to help ensure safe passage for ships wrecked in the Strait of Hormuz.

Higher oil futures prices make palm oil a more attractive feedstock option for biodiesel production.

The ringgit strengthened 0.43% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

According to the Statistics Bureau, Indonesia exported 5.85 million tonnes of crude and refined palm oil in the first quarter, up 9.30% year-on-year.

Meanwhile, India’s palm oil imports fell 27% in April to a year-on-year low, as weak institutional demand and a recent price increase, which narrowed its discount to competing oils, prompted refiners to cut purchases, five dealers reported.

Tags: Malaysia, palm oil, prices