Palm oil prices closed higher on Monday

Palm oil prices closed higher, following higher soybean oil and crude oil prices, said David Ng, a trader at Iceberg X in Kuala Lumpur. He said the ongoing conflict in the Middle East is supporting sentiment in the palm oil market. Ng sees support at 4,500 ringgit per tonne and resistance at 4,680 ringgit per tonne.

Malaysian palm oil futures rose on Monday, recovering slightly from the previous session’s decline, as geopolitical tensions in the Middle East boosted oil prices and spurred buying interest in the oilseed.

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

The benchmark FCPO1 palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 19 ringgit, or 0.42%, to 4,557 ringgit (US$1,146.99) per metric tonne at the close. The contract had fallen 2.26% on Friday.

Renewed tensions in the Middle East have reignited buying interest in the market, as traders added a risk premium to prices after Friday’s sharp decline, said Paramalingam Supramaniam, director of brokerage Pelindung Bestari.

However, Supramaniam said demand constraints and better-than-expected supply will limit gains in the coming days.

Shipping experts estimate that Malaysian palm oil exports from April 1-10 are likely to decline by 30.7% to 38.9% compared to the previous month.

Malaysia April 1-10 vs. March 1-10 Palm Oil Exports (metric tons)

AMSPEC: 402,916 vs. 581,364 (-178,448 or -30.7%)

ITS: 380,490 vs. 622,445 (-241,955 or -38.9%)

Oil prices jumped above $100 per barrel again as the US Navy prepared to block ships traveling to and from Iran through the Strait of Hormuz after Washington and Tehran failed to reach an agreement to end the war.

Malaysian palm oil inventories fell in March for the third month in a row, reaching a seven-month low as a sharp rise in exports more than offset a modest increase in production.

The most active Dalian soybean oil contract fell 0.39%, while the CPO1 palm oil contract fell 1.47%. Soybean oil prices on the Chicago Mercantile Exchange rose 1.33%.

Palm oil prices follow the price movements of competing edible oils as it fights for share in the global vegetable oil market.

India’s palm oil imports fell nearly 19% in March from the previous month to a three-month low after rising tropical oil prices, in line with energy market dynamics, prompted refineries to suspend purchases, a trade body reported.

Tags: prices, palm oil