NEW DELHI: Malaysian palm oil futures settled higher on Thursday even as an industry regulator said inventories in June surged to a four-month high.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 17 ringgit, or 0.43%, to settle at 3,935 ringgit ($839.91).
Expectations that exports are likely to pick up this month supported prices.
July production and export are expected to rise, said Anilkumar Bagani, head of research from India-based Sunvin Group said.
Also, higher palm oil imports by India, the world’s biggest buyer of the tropical oil, helped prop up prices.
India’s palm oil imports in June rose to reach the highest level in six months on robust demand from refiners for upcoming festivals.
Malaysia’s palm oil stocks at the end of June rose 4.35% from May to 1.83 million metric tons, the highest since February, the Malaysian Palm Oil Board (MPOB) said on Wednesday.
Malaysia’s palm oil stocks hit 4-month high in June on weak exports
Crude palm oil production declined 5.23% from May to 1.62 million tons, while palm oil exports plunged 12.82% to 1.21 million tons.
A Reuters survey had forecast inventories at 1.83 million tons, with output at 1.62 million tons and exports at 1.24 million tons.
Crude palm oil prices are expected to remain supported by tighter production conditions and strong demand from top buyers India and China, state agency Malaysian Palm Oil Council (MPOC) said.
Soyoil prices on the Chicago Board of Trade rose 1.5%. Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.
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