Palm oil edges up tracking soyoil, but exports concerns linger

Malaysian palm oil futures rose marginally on Monday, tracking gain in rival soyoil prices, while concerns around key producer Malaysia’s exports weighed.

The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange rose 3 ringgit, or 0.08%, to 3,847 ringgit ($811.77) a metric ton by the midday break.

Dalian’s most-active soyoil contract DBYcv1 rose 0.81%, while its palm oil contract DCPcv1 dipped 0.05%. Soyoil prices on the Chicago Board of Trade BOcv1 climbed 0.65%.

The outlook for the soybean harvest in Rio Grande do Sul has deteriorated swiftly after torrential rain flooded fields.

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

Crude oil futures climbed after Saudi Arabia hiked June prices for most regions and the prospect of a Gaza ceasefire deal appeared slim, renewing fears the Israel-Hamas conflict could still widen in the key oil producing region. O/R

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

“Palm oil was seen trading in a tight range today as the Chinese markets reopened after Labour Day holidays,” said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group.

Although a weaker ringgit against the dollar supports the market, Malaysia’s palm oil exports from May 1 to 5 is seen to be sharply down, adding weight to palm prices, Bagani added.

The Malaysian ringgit MYR=, palm’s currency of trade, weakened 0.04% against the dollar.

Malaysia’s exports of palm oil products in April were estimated to have declined 7.79% month-on-month amid stiff price competition from other edible oils.

Tags: futures r, prices, Malaysia, soyoil, palm oil, benchmark contract