Crude palm-oil futures on Malaysia’s derivatives exchange rose to their
highest in three weeks helped by stronger-than-expected China manufacturing data
and a likely fall in CPO production this month.
The benchmark June contract at Bursa Malaysia Derivatives ended at 2,456
ringgit a metric ton–up 0.6% from Wednesday's close.
Preliminary Chinese manufacturing figures for March, which came out at 51.7
compared with a final score of 50.4 in February. A reading above 50 indicates an
expansion in manufacturing activity.
Palm-oil output in Southeast Asia may continue to fall more in March because
of seasonal factors and could further ease inventory levels, a trading executive
at a foreign commodities brokerage in Singapore said.
Some Asian traders say higher soyoil during Asian hours and technical charts
are aiding to the rise in palm oil as well.
"Palm oil's short-term technical indicators have turned long and is targeting
MYR2,525/ton-MYR2,550/ton [resistance]" for now, said Chandran Sinnasamy, head
dealer at Kuala Lumpur-based LT International.
In the upcoming April-June quarter, however, palm oil could ease from current
levels as farmers in South America and India speed up oilseed harvesting rounds,
Deutsche Bank analyst Michelle Foong said in a note.
"We continue to see downside risks to CPO…due to expectations of slower CPO
exports to India given high inventory of palm-oil stocks at ports and
pipelines," Ms. Foong said.
India is the world's biggest consumer of palm oil and gets it from Indonesia
and Malaysia.
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