Palm oil prices rose on Thursday

According to David Ng, a Kuala Lumpur-based trader at Iceberg X, palm oil prices have risen, following the rise in crude oil prices amid escalating tensions in the Middle East. The effective closure of the Strait of Hormuz continues to support oil prices. Ng forecasts palm oil prices will hold at 4,150 ringgit per tonne, with resistance at 4,300 ringgit per tonne.

Malaysian palm oil futures rebounded on Thursday, closing at their highest level in a month, thanks to a sharp rise in crude oil prices.

The benchmark FCPO1 palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 26 ringgit, or 0.62%, to close at 4,205 ringgit (US$1,067.26) per metric tonne, its highest since February 5.

The contract opened the trading session at 4,268 ringgit per tonne, its highest since January 30, after declining early on Thursday.

Palm oil futures on the Bursa Malaysia exchange recovered from initial losses. “The recovery in palm oil futures is attributed to a significant change in price dynamics, as palm oil is now trading at a discount to gasoil due to the extraordinary rise in gasoil prices amid tensions in the Middle East,” said Anilkumar Bagani, head of commodity research at Mumbai-based brokerage Sunvin Group.

The threat of disruptions in vegetable oil supplies through the Middle East also supported palm oil prices, as it could benefit from increased demand due to limited supplies of soybean and sunflower oils, he added.

The most active soybean oil contract in Dalian remained unchanged, while the palm oil contract rose 0.64%. Soybean oil on the Chicago Mercantile Exchange rose 0.47%.

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

Oil prices rose on Thursday, extending their gains amid the escalating US-Israeli war against Iran, which continues to disrupt supplies, forcing some major producers to cut output and others to take measures to ensure supply security.

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

According to Reuters technical analyst Wang Tao, a retest of the 4,138 ringgit per metric tonne support level is possible, with a break below it potentially triggering a decline into the 4,098-4,121 ringgit range.

Tags: palm oil, prices