Palm oil futures rose on Tuesday, buoyed by robust performances in competing edible oils from the Dalian Commodity Exchange and Chicago Board of Trade, as market players eagerly anticipate further insights from a key industry conference being held in Kuala Lumpur.
The benchmark palm oil contract scheduled for May delivery on the Bursa Malaysia Derivatives Exchange saw an increase of RM52, representing a gain of 1.14 per cent, to settle at RM4,611 (approximately US$1,045.58) per metric ton by the midday interval.
Traders noted the current range-bound trading of crude palm oil futures between RM4,600 and RM4,650, attributing the stability to firmness in rival markets, particularly in Dalian, while awaiting substantial direction from developments expected at the Palm Oil Conference.
Market movements in competing oils showed notable strength, with Dalian’s most-active soyoil contract gaining 0.48 per cent and its palm oil counterpart up by 0.35 per cent. Similarly, Chicago Board of Trade soyoil prices advanced significantly by 1.14 per cent, supporting optimism in palm oil market sentiment.
Palm oil prices are notably influenced by trends in competing vegetable oils, given their interchangeable roles within the global vegetable oil marketplace.
In Malaysia, strategic initiatives are underway to boost palm oil output by introducing higher-yielding varieties without extending the cultivated areas, as stated by Plantation and Commodities Minister Johari Abdul Ghani. This strategy is particularly pertinent given rising international demand driven by Indonesia’s recent policy to increase the palm oil content in biodiesel.
Additionally, Malaysia’s palm oil inventories are projected to decline to approximately 1.5 million metric tons by the end of February, marking their lowest point in nearly two years. This reduction results from production disruptions caused by floods combined with heightened seasonal demand linked to Ramadan festivities.
Meanwhile, palm oil faces new market dynamics in India, with industry experts indicating its share of annual edible oil imports is poised to slip below that of softer oils. This shift is primarily due to palm oil’s widening premium over alternatives such as soyoil and sunflower oil, prompting refiners to favour more competitively priced substitutes.
Technical market assessments suggest potential short-term vulnerability, forecasting possible retreats towards the February 17th low of RM4,457 per metric ton, owing to emerging technical patterns indicative of a double-top formation.
Palm oil remains a critical global commodity, with Malaysia’s strategic innovations positioning it for sustained relevance amid evolving market conditions and demand dynamics.
Dekel Agri-Vision PLC (LON:DKL) aspires to become a leading agro-industrial company in West Africa, one that creates value for shareholders whilst at all times placing the interests of the local communities and environment in which it operates in at the heart of its operations.
