JAKARTA: Malaysian palm oil futures opened higher on Thursday, supported by gains in rival vegetable oils in the Dalian and Chicago markets and a weaker ringgit.
Palm oil ends higher on rival oils strength, weaker ringgit
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 61 ringgit or 1.24%, to 4,978 ringgit ($1,128.29) a metric ton in early trade.
Fundamentals
Dalian’s most-active soyoil contract rose 2.29%, while its palm oil contract gained 2.92%. Soyoil prices on the Chicago Board of Trade were up 0.22%.
Palm oil tracks price movements of rival edible oils as it competes for a share in the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.34% against the US dollar, making the vegetable oil cheaper for buyers holding foreign currencies.
India’s vegetable oil imports are estimated to decline further in the 2024-25 season to 15 million metric tons, as favourable weather will likely boost domestic production, an industry group said.
India’s palm oil imports surged 59% in October to a three-month high compared to the previous month, as refiners boosted purchases to replenish stocks depleted by lower-than-usual imports in recent months and a strong festive demand.
Malaysia’s palm oil inventories are forecast to fall in October, marking their first decline in three months, on lower output and higher exports, a Reuters survey showed.
Oil prices climbed after a sell-off triggered by the US presidential election, as risks to oil supply from a Trump presidency and a hurricane building off the Gulf Coast outweighed a stronger US dollar and higher inventories.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil may keep climbing towards 5,023 ringgit, before reversing its uptrend, according to Reuters technical analyst Wang Tao.
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