Palm oil prices rose on Monday

Palm oil prices rose in the Asian session: Nomura analysts noted in a note that crude palm oil prices are likely to hover around 4,500 ringgit per tonne this week. Prices should remain relatively stable as concerns about lower oil prices are offset by rising exports and a weaker ringgit. If exports weaken, crude palm oil prices could fall to around 4,400 ringgit per tonne, Nomura reports.

Malaysian palm oil futures closed higher for the second consecutive day on Monday, as cargo inspection data indicating strong exports and mandatory biodiesel blending in Indonesian fuels boosted investor sentiment.

The benchmark FCPO3 palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange rose 21 ringgit, or 0.46%, to 4,589 ringgit (US$1,128.91) per metric tonne at the close of trading.

According to Paramalingam Supramaniam, director of brokerage Pelindung Bestari, high exports in June supported the market, and the mandatory minimum inclusion policy under the B50 program further strengthened it.

In Indonesia, the launch of the B50 biodiesel program, a blend of 50% palm oil-based biodiesel and 50% conventional diesel, is scheduled for July 1.

According to cargo assessment experts, Malaysian palm oil exports increased by 10.6-11.1% from June 1 to 25 compared to the previous month. They are expected to release their full-month forecasts on Tuesday.

“Peninsular Malaysia production is also showing a stronger-than-expected recovery, although East Malaysia continues to see lower output. Weather conditions remain favorable and are expected to persist, likely into the third quarter of the year,” Supramaniam said.

Supramaniam also said he expects prices to remain largely within the target range, at least until the Malaysian Palm Oil Council’s report is released on July 10.

The most actively traded Dalian soybean oil contract rose 0.65%, while the palm oil contract rose 1.26%. Soybean oil prices on the Chicago Mercantile Exchange rose 0.49%.

Palm oil prices follow those of competing edible oils as it competes for share in the global vegetable oil market.

Oil prices stabilized after Iran and the United States agreed to end recent hostilities in the Persian Gulf, and Middle Eastern producers continued to ship crude and liquefied natural gas despite new attacks on vessels.

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

The ringgit strengthened 0.44% against the dollar, making the commodity more expensive for buyers holding foreign currency.

Tags: prices, palm oil