JAKARTA: Malaysian palm oil futures rose on Friday and posted their first monthly gain in three months, underpinned by strength in rival oils and expectations of a rebound in India’s purchases.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 42 ringgit, or 0.93%, to 4,553 ringgit ($1,020.85) a metric ton at closing.
“India … has a significantly lower import in January and February. The stocks are going down and if the import and processing margins sustained, India could be seen coming up for fresh coverage ahead of Ramadan,” said Anilkumar Bagani, commodity research head at Mumbai-based brokerage Sunvin Group.
The contract rose 5.18% for the month despite posting its first weekly drop in six weeks. The contract fell 3.28% for the week.
Dalian’s most-active soyoil contract was up 1.06%, while its palm oil contract rose 0.31%. Soyoil prices on the Chicago Board of Trade (CBOT) gained 0.26%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Palm oil falls on weak rival oils, bearish outlook
Indonesia will lower its crude palm oil reference price to $954.50 per ton in March, a trade ministry official said on Friday but export tax will be kept at $124 a ton.
Exports of Malaysian palm oil products in February estimated to fall between 8.5% and 11% according to independent inspection company
AmSpec Agri Malaysia and cargo surveyor Intertek Testing Services.
A recovery in palm oil production and lower imports by rate-sensitive consumers are expected to drive prices lower in the coming months, even as top producer Indonesia boosts biodiesel consumption, industry analysts told a conference in Kuala Lumpur earlier this week.
Palm oil may retest support at 4,476 ringgit per metric ton, a break below which could open the way toward 4,411 ringgit to the 4,453-ringgit range.
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