Business Recorder
KUALA LUMPUR: Malaysian palm oil futures rose on Tuesday, recouping the previous session’s losses, as firmer crude oil prices and strong export momentum supported the market amid the Middle East conflict. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 39 ringgit, or 0.81%, to 4,850 ringgit ($1,201.98) a metric ton by the midday break. It fell 0.58% on Monday. The market continues to hinge on the direction of crude oil prices amid ongoing uncertainty over the geopolitical situation in the Middle East, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari. “If exports continue in the same direction as we saw in March and existing stock levels hold steady, the market is expected to remain resilient,” Supramaniam said. Malaysia’s palm oil inventories likely dropped in March by the most in three years to their lowest level since last July, as a surge in exports more than offset a modest increase in output, a Reuters survey showed. The Malaysian Palm Oil Board is expected to release its supply and demand report on April 10. Dalian’s most-active soyoil contract rose 0.85%, and its palm oil contract added 0.34%. Soyoil prices on the Chicago Board of Trade firmed 0.39%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices extended gains as a U.S.-imposed deadline loomed for Iran to open the Strait of Hormuz or be “taken out”, with President Donald Trump threatening to order attacks on Iranian bridges and power plants. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.25% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies. Palm oil is biased to fall into a range of 4,696 ringgit to 4,749 ringgit per ton, as a correction from 4,919 ringgit looks incomplete, Reuters technical analyst Wang Tao said.
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