Palm Oil Posts First Monthly Gain In Three Months As India Demand Outlook Brightens

Malaysian palm oil futures rose on Friday, notching their first monthly gain in three months, buoyed by stronger competing oils and expectations of a rebound in Indian buying.

The benchmark palm oil contract for May delivery on Bursa Malaysia Derivatives rose 42 ringgit, or 0.93%, to close at 4,553 ringgit ($1,020.85) per tonne.

Anilkumar Bagani, head of commodity research at Mumbai-based brokerage Sunvin Group, said:
"India recorded notably low imports in January and February. With inventories running low, and if import and refining margins remain favourable, we could see a pickup in Indian purchases ahead of Ramadan."

Although the contract posted its first weekly decline in six weeks, it gained 5.18% over the month, while slipping 3.28% for the week.

• The most actively traded soyoil contract on the Dalian exchange rose 1.06%, while its palm oil contract gained 0.31%.
• Soybean oil prices on the Chicago Board of Trade (CBOT) rose 0.26%.

Palm oil tends to track price movements of competing vegetable oils, as it competes for a share of the global vegetable oils market.

Palm Oil Slips On Weaker Rival Oils And Bearish Outlook

• Indonesia announced it will lower its reference price for crude palm oil to $954.50 per tonne in March, according to a trade ministry official, while keeping the export tax unchanged at $124 per tonne.
• Malaysian palm oil product exports for February are expected to fall between 8.5% and 11%, according to independent inspection firms AmSpec Agri Malaysia and Intertek Testing Services.

Industry analysts speaking at a conference in Kuala Lumpur this week said a recovery in palm oil production, combined with lower imports by price-sensitive consumers, could weigh on prices in the coming months, even as Indonesia raises its biodiesel consumption.

Technical Outlook

Palm oil may retest support at 4,476 ringgit per tonne, and a break below this level could open the way for further declines toward the 4,411–4,453 ringgit range.

Source: Reuters