Palm oil snaps two sessions of losses on stronger rivals

Malaysian palm oil futures climbed on Monday after two consecutive sessions of losses, supported by a recovery in rival vegetable oils and weaker Malaysian ringgit.

The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange gained 54 ringgit, or 1.42%, to 3,863 ringgit ($807.48) a metric ton at closing. The contract had posted a 1.93% weekly drop on Friday.

“The futures opened gap higher following bullish momentum in Chinese vegetable oil futures and lower production estimates from SPPOMA for Feb. 1-15,” said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group.

Dalian Commodity Exchange’s soyoil contract DBYcv1 jumped 1.71% while its palm oil contract DCPcv1 rose 1.65%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

The Malaysian ringgit, the contract currency of trade, weakened 0.13% against the U.S. dollar. A weaker ringgit make the contract more attractive for foreign currency holders.

Exports of Malaysian palm oil products for Feb. 1-15 were seen falling by 4.31% to 17% from the previous month, cargo surveyors reported.

Malaysia has maintained its March export tax for crude palm oil at 8% and raised its reference price.

Tags: Malaysia, soyoil, palm oil, futures, Market, contract, vegetable oils