in Commodity News 30/01/2023
Malaysian palm oil futures climbed on Monday to their highest in nearly three weeks as worries grew that floods could hurt output in the world’s second largest producer.
The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange gained 68, or 1.74%, to 3,970 ringgit ($937.43) a tonne. The contract rose for a third straight session and hit its highest since Jan. 11.
Farmers in Malaysia’s southern state of Johor are worried that stagnant flood waters would affect their palm oil yields, after heavy rains last week displaced thousands of people in several palm oil producing states, according to state news agency Bernama.
Chinese markets opening sharply higher after the Lunar New Year holidays and talks of Indonesia may further reduce its domestic palm oil sales ratio also supported prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Dalian’s most-active soyoil contract DBYcv1 rose 1.3%, while its palm oil contract DCPcv1 gained 2.5%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices climbed on tensions in the Middle East following a drone attack in Iran and as Beijing pledged over the weekend to promote a consumption recovery which would support fuel demand.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil may bounce more towards 3,980 ringgit, as it has broken a resistance at 3,888 ringgit per tonne, Reuters technical analyst Wang Tao said.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Subhranshu Sahu)
