Palm oil price struggles to regain upward trend

Palm oil futures quotes continue to rise amid a projected decline in production in parts of Malaysia, the world’s second largest producer. A recently realized price cut has also attracted buyers sensitive to the cost of the product.

Favorable buying is supporting palm oil, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. Signs of lower production also helped the market, he said.

Production in Malaysia’s southern peninsula fell 5.6 percent in the first 25 days of June from the previous month, the expert said, citing data from the Southern Peninsula Palm Oil Producers Association.

Tropical oil prices in Malaysia also rose amid rumors that Indonesia, the largest producer, will raise export duties in July, said Anilkumar Bagani, head of research at Sunvin Group in Mumbai. He estimated that the benchmark price for crude palm oil could be set at about $800.50 a ton, raising the total duties by about $25. The government will announce the official base price later this month.

Tags: prices, palm oil