Malaysian palm oil futures rise, outlook remains bullish

NEW DELHI: Malaysian palm oil futures rose yesterday, mirroring gains in rival soyaoil, to reverse losses in the previous two sessions.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose RM25, or 0.60 per cent, to RM4,161 a tonne by the midday break.

Palm oil futures closed lower on Wednesday, falling for a second straight session.

Malaysia’s financial markets were closed on Thursday for a public holiday.

The outlook for Malaysian palm oil prices was bullish due to the upward momentum in soyaoil, and the market was now waiting for industry estimates for March output and exports from leading producer Malaysia, said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage.

Soyaoil prices on the Chicago Board of Trade rose 0.95 per cent.

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

Oil prices jumped more than US$1 a barrel on Thursday, closing out the month higher on the prospect of Organisation of the Petroleum Exporting Countries and allies staying the course on production cuts, ongoing attacks on Russia’s energy infrastructure and a falling United States rig count tightening crude supplies.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Indonesia aims to double subsidies for palm oil replanting to 60 million rupiah per hectare from May to boost farmers’ participation, said Chief Economic Minister Airlangga Hartarto on Thursday.

Indonesia’s January palm oil exports, including refined products, stood at 2.8 million tonnes, down from 2.95 million tons in the same month last year, data from the Indonesian Palm Oil Association showed on Thursday.

Production of crude palm oil and kernel oil rose to 4.63 million tonnes from 4.26 million tonnes, the data showed.