KUALA LUMPUR:As market participants await March palm oil data due next week, Malaysian Palm oil Prices extended gains for a fourth day on Thursday to their highest level in more than a week. These gains were support by expectations of lower production and inventories.
By midday, the benchmark palm oil contract for delivery in June on the Bursa Malaysia Derivatives Exchange had increased by 25 ringgit, or 0.67 percent, to a price of 3,732 ringgit. This week, the contract has gained 6.26 percent.
According to commodity research head of Sunvin Group Anilkumar Bagani, “the general market consensus is of a decline in Malaysian
Palm oil Prices inventories by the end of March below 2 million tonnes and a further reduction to 1.65-1.7 million tonnes by the end of April.”
Indonesia, the world’s largest exporter of palm oil, increased domestic market obligation and restricted export, diverting global demand for palm oil to Malaysia while production remained uncertain, according to him.
Sources stated that a millers’ association has estimated a 22.9% decline in output between March 1 and 25. Cargo surveyors are scheduled to release data on March exports on Friday.
The most active soyoil contract in Dalian went up 0.6%, while the palm oil contract went up 0.51 percent.
On the Chicago Board of Trade, soyoil prices were down 0.6 percent.
As they compete for a share of the global market for vegetable oils, palm oil is affect by changes in the prices of related oils.
According to Reuters technical analyst Wang Tao, the price of palm oil may rise to between 3,773 and 3,810 ringgit per tonne in order to fill a gap that began on March 22.