Malaysian Palm Oil Firms On Lower Inventory Outlook

Malaysian palm oil futures rose on Tuesday (Apr 9), snapping three consecutive sessions of losses, supported by the prospect of lower inventories but higher premiums capped gains.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose RM16, or 0.37 per cent, to RM4,311 (US$908.19) a metric tonne in early trade.

Malaysia’s palm oil inventories are likely to have declined 6.65 per cent from the prior month to an eight-month low of 1.79 million tons at the end of March, a Reuters survey showed on Thursday.

The Malaysian Palm Oil Board (MPOB) is scheduled to release the data on April 15.

Palm is trading higher, but its premium over soft oils such as soybean and sunflower has somewhat softened demand, said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage.

The trade is expected to be sideways ahead of the Malaysian market holidays on April 10 and April 11, Bagani added.

India’s palm oil imports fell to their lowest level in 10 months in March as buyers substituted it with cheaper sunflower oil.

Soyoil prices on the Chicago Board of Trade rose 0.5 per cent.

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

Palm oil may drop further to RM4,242 per metric tonne, as pointed by a rising trendline.

Oil prices rose on Tuesday after hopes diminished that negotiations between Israel and Hamas would lead to a ceasefire in Gaza and ease tension in the Middle East.

Industrial metals prices extended their gains on Tuesday with expectations of a worldwide manufacturing rebound, while Asian shares crept up a little more cautiously ahead of this week’s U.S. inflation data and a crucial European Central Bank meeting. – Reuters

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