Palm oil prices rose on Monday
Palm oil prices rose, with the Bursa Malaysia Derivatives contract for April delivery rising 8 ringgit to 4,162 ringgit per tonne. Crude palm oil prices are likely to continue rising, reaching 4,200 ringgit per tonne this week as demand rises ahead of the Chinese New Year and amid concerns about weak production in Malaysia, Nomura’s Raghavendra Diwekar noted in a research note. However, if prices for other edible oils decline or exports decline sharply, crude palm oil prices could fall to around 4,050 ringgit per tonne, Diwekar added.
Malaysian palm oil futures closed higher on Monday, boosted by rising prices for rival soybean oil in the Chicago and Dalian markets, as the market awaits data from the Malaysian Palm Oil Council and a price forecast conference.
The benchmark April palm oil contract FCPO1 on the Bursa Malaysia Derivatives Exchange rose 19 ringgit, or 0.46%, to 4,173 ringgit (US$1,061.29) per metric ton at the close of trading.
The most-active soybean oil contract in Dalian rose 0.07%, while the palm oil contract CPO1 fell 0.31%. Soybean oil prices on the Chicago Mercantile Exchange rose 1.63%.
“The market will follow Dalian data today until tomorrow’s MPOB data and POC analysts’ forecasts for further developments,” a Kuala Lumpur-based trader said.
Palm oil prices follow those of competing edible oils as it battles for share in the global vegetable oil market.
According to preliminary data, the MPOB plans to release its monthly report on February 10, with a performance review (POC) scheduled from February 9 to 11.
According to a Reuters poll, Malaysian palm oil inventories are expected to break a 10-month upward trend in January, as exports surged amid a seasonal production slowdown.
Meanwhile, oil prices fell 1% on Monday as immediate concerns about conflict in the Middle East eased after the US and Iran pledged to continue talks on Tehran’s nuclear program over the weekend, calming investor concerns about supply disruptions.
Lower oil prices make palm oil a less attractive feedstock option for biodiesel production.
The ringgit strengthened 0.33% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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