Crude palm oil futures on Malaysia’s derivatives exchange ended higher
Tuesday, as investors looked for bargains after the tropical oil slipped in the
previous session.
The benchmark June contract on Bursa Malaysia Derivatives ended 1.3% higher
at 2,415 ringgits a metric ton, after moving in a MYR2,397/ton-MYR2,426/ton
band.
"The pullback on Monday spurred some physical buying today," which
underpinned palm oil futures, a trading executive at a foreign commodities
brokerage said.
The next event on the horizon for palm oil is the March 1-20 export estimate
by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., with
shipments likely higher on improving demand from the northern hemisphere as the
winter season ended.
Palm oil demand usually falls in winter as the tropical oil tends to cloud
and turns jelly-like in cold weather.
While palm oil has recovered some lost ground, any gains in the tropical
oil–found in a wide variety of consumer products ranging from soap to chocolate
and biscuits–is limited for now, due to a widely-expected bumper soy crop from
South America and ample palm oil supply in Southeast Asia.
"Exports could nudge higher in March, but I doubt the numbers will be good
enough to ease stockpiles [at the end of March]," a trading executive in
Singapore said.
Stockpiles in Malaysia, the world's no. 2 producer, rose to a record 2.63
million tons in December, before easing to 2.44 million tons at end-February,
according to a March 11 report by the Malaysian Palm Oil Board, the industry
regulator.
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