Palm oil futures advanced on Monday as investors focused on stronger early September exports, a weaker Ringgit and rising crude prices, with a jump in stocks capping gains.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 88 ringgit, or 2.45%, to 3,682 ringgit ($817.77) a tonne, its biggest daily rise in a month.
Exports during Sept. 1-10 rose between 9.3% and 25.5% from the same period in August, cargo surveyors said.
A persistently weak Malaysian Ringgit has also triggered bargain-buying and prompted consumers to replenish inventories, Refinitiv Commodities Research said in a note.
Malaysia’s end-August inventories climbed 18.16% from the previous month to 2.09 million tonnes, its highest in 33 months, according to Malaysian Palm Oil Board (MPOB) data.
Production rose 9.7% with peak production season getting underway, while exports fell 1.9%.
MPOB data is a confirmation of building stocks despite relatively strong exports in light of rising competition from top producer Indonesia, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Palm oil’s discount over competing oils continues to support demand but it is helping ease world soy oil and sun oil prices, forcing palm oil to stay lower to keep its discount intact, Bagani said.
Soyoil prices on the Chicago Board of Trade rose 0.2%. The Dalian Commodity Exchange was closed for a public holiday.
Source: Business Recorder