NEW DELHI: Palm Oil Futures Tick Higher Malaysian palm oil futures jumped on Monday due to falling inventories and expectations of lower output because of dry weather conditions.
Palm oil prices surged further as production concerns deepened and inventories continued to decline. The market saw an extension of gains driven by fears of reduced output coupled with diminishing stockpiles. This upward momentum reflected the ongoing challenges faced by palm oil producers, contributing to a tightening supply situation.
“Palm Oil Futures Tick Higher on Production Woes and Reduced Inventories”
During the midday break, the benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange showed an increase of 8 ringgit, or 0.22%, reaching 3,719 ringgit ($794.15). A Mumbai-based dealer expressed concerns about potential disruptions in palm oil production in Malaysia and Indonesia due to unfavorable weather conditions, coupled with lower inventories.
Data from the industry regulator revealed that Malaysia’s palm oil stocks at the end of November experienced the first decline in seven months, primarily driven by a significant drop in production compared to exports.
Despite this, gains were tempered by a 13.6% month-on-month decrease in Malaysian palm oil product exports in the first half of December, as reported by cargo surveyor Intertek Testing Services.
Soyoil futures on the Chicago Board of Trade saw a modest increase of 0.12%. Palm oil, being part of the global vegetable oils market, is influenced by the price movements of related oils.
Indonesia announced plans to set its crude palm oil reference price at $767.51 per metric ton for the Dec. 16-31 period, reflecting a decrease from the first half of the month.
In November, India witnessed a nearly 23% month-on-month surge in palm oil imports, reaching a near three-month high, as refiners favored the tropical oil over soyoil and sunflower oil due to substantial discounts.
According to Reuters technical analyst Wang Tao, there is potential for palm oil to bounce to 3,748 ringgit per metric ton, driven by a wave c.
In broader market dynamics, oil prices in Asia rose nearly 1% in early trade on Monday, supported by lower exports from Russia and concerns about oil supply disruption due to Houthi attacks on ships in the Red Sea. However, Asia stocks slipped on Monday, setting a subdued tone for the week.