KUALA LUMPUR: Malaysian palm oil Trade edged up on Tuesday to trade in a tight range, as traders weighed better exports, concerns over stormy weather hurting output and a stronger ringgit.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 37 ringgit, or 0.9%, to 4,149 ringgit ($904.91) a tonne by the midday break.
The contract tracked higher Chicago soyoil prices higher, but palm’s huge discount to soyoil and optimism over November exports kept sellers at bay, a Kuala Lumpur-based trader said.
The ringgit, palm’s currency of trade, rose for a third day against the dollar, making the commodity more expensive for holders of other currencies.
Disruptions to palm oil supplies because of tropical storms in top producers Indonesia and Malaysia are expected to continue into the first quarter of 2023, keeping prices strong, the Malaysian Palm Oil Board (MPOB) said on Monday.
Palm slumps over 4% as ringgit firms, rival oils weaken
India’s palm oil imports in 2021/22 fell 4.8% from a year earlier as overseas buying of soyoil jumped 45.3% to a record high after Indonesia restricted shipments of palm oil, a trade body said on Monday.
Dalian’s most-active soyoil contract fell 0.8%, while its palm oil contract was down 2.3%.
Soyoil prices on the Chicago Board of Trade rose 0.3%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysian Palm Oil Council (MPOC) chief executive officer Wan Aishah Wan Hamid said the higher demand for palm oil, volatility of Brent crude oil prices, and geopolitical tensions remain factors in determining price direction.
She said over the past few weeks, the palm oil price has started to see an upward trend due to a combination of weaker Malaysian ringgit and supply worries due to floods in both Indonesia and Malaysia.
Wan Aishah believes that this would keep palm oil prices upbeat and remain between RM4,000 per tonne and RM4,400 per tonne until December 2022.
“For the medium term, the ongoing Russia and Ukraine conflict will still be a factor and palm oil supply growth will likely plateau next year.
“We forecast that price will likely remain between RM3,900 per tonne and RM4,300 per tonne until March 2023,” she said during her presentation at the Palm Oil Internet Seminar yesterday.