Palm oil futures opened higher on Friday, building on gains from the previous session as the market followed the strength in Chicago soyoil. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange increased by 22 ringgit, or 0.56%, reaching 3,957 ringgit ($847.69) in early trade.
Malaysia’s palm oil stocks at the end of June rose by 4.35% from May, totalling 1.83 million metric tons, the highest level since February, according to the Malaysian Palm Oil Board (MPOB). This increase in stocks was attributed to a sharper decline in exports compared to production. Specifically, crude palm oil production fell by 5.23% from May to 1.62 million tons, while palm oil exports dropped by 12.82% to 1.21 million tons. A Reuters survey had anticipated these figures, forecasting inventories at 1.83 million tons, with production at 1.62 million tons and exports at 1.24 million tons.
India’s palm oil imports in June reached the highest level in six months due to robust demand from refiners preparing for upcoming festivals. Crude palm oil prices are expected to remain supported by tighter production conditions and strong demand from top buyers India and China, as noted by the Malaysian Palm Oil Council (MPOC). In related markets, soyoil prices on the Chicago Board of Trade rose by 1.0%. Palm oil prices are influenced by movements in related oils as they vie for a share of the global vegetable oils market.
Palm oil may see further gains, potentially climbing into a range of 4,018-4,058 ringgit per metric ton, as the uptrend from the June 26 low of 3,830 ringgit appears to have resumed.
The palm oil market shows strong potential for continued gains, bolstered by favourable conditions and significant demand from major markets.
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.
