Malaysian palm oil price hits over 4-month high on bullish price forecasts
KUALA LUMPUR: Malaysian palm oil futures extended gains to a more than four-month high on Tuesday evening, supported by bullish price forecasts at an industry conference over the weekend and strength in U.S. soyoil.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose as much as 1.9 percent to 2,269 ringgit ($549.39) a tonne, its strongest since Sept. 7.
“Palm is up on support from Friday’s gains in rival oilseed and bullish price outlook by leading market analysts at the Pakistan Edible Oils Conference,” said a Kuala Lumpur – based futures trader. Malaysian and U.S markets were closed on Monday for holidays.
Leading analysts forecast at the conference that palm prices would rise in the coming months as production and stocks fall in line with a seasonal trend.
Prices of vegetable oils, including palm oil, are set to rise by $50 -$100 per tone by June, according to analyst James Fry, while Dorab Mistry forecast benchmark prices to rise to 2,400 ringgit a tone by end- March.
Indonesian palm oil prices are also forecast to rise to as high as $600 a tone amid rising demand from the food and energy sector, slowing production growth and declining global stockpiles, said analyst Thomas Mielke.
Rising demand could also reduce stockpiles and support prices. Malaysian palm oil shipments during Jan.1- 20 rose 11.8-12.9 percent from a month earlier, according to cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia.
In related oils, the Chicago March soybean oil contract rose 0.8 percent on Friday, and was last up 0.5 percent on Tuesday.
Palm oil prices are impacted by movements in soyoil rates, as they complete for a share in the global vegetable oil market.
Meanwhile, the May soybean oil contract on the Dalian Commodity Exchange was up 0.8 percent and the Dalian January palm oil contract gained 0.2 percent.