Lang
Malaysian palm oil futures rose on Tuesday, recovering from earlier losses, though weak soybean oil prices and softer export demand limited the gains.
The benchmark palm oil contract for March delivery on Bursa Malaysia Derivatives climbed 35 ringgit, or 0.81%, to close at 4,373 ringgit ($975.03) per tonne. The contract had fallen 0.69% in the previous session.
David Ng, a senior trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd, said crude palm oil was affected by falling soybean oil prices during Asian trading hours, as well as a slowdown in the pace of exports, which weighed on prices.
Malaysian palm oil product exports for December fell by between 2.5% and 7.8%, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
The most active soybean oil contract on the Dalian exchange rose 0.08%, while its palm oil contract gained 1.94%. Meanwhile, soybean oil prices on the Chicago Mercantile Exchange fell 0.07%.
Palm oil tracks price movements of competing vegetable oils, as it competes for a share of the global vegetable oil market.
Palm Oil Slips on Weak Demand From India
Oil prices edged lower on Tuesday as demand expectations faded, although tighter Russian and Iranian supplies due to expanded Western sanctions limited the losses.
Weaker crude oil futures make palm oil a less attractive option as a feedstock for biofuel production.
The ringgit, the currency in which palm oil is traded, strengthened 0.51% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Malaysia's palm oil stocks are expected to fall in December for a third consecutive month, amid lower output caused by recent heavy rains that affected the harvest, according to a Reuters survey.