MALAYSIAN palm oil futures edged up on Wednesday in anticipation of tighter supplies from the world’s top growers, although weak export data dampened sentiment and kept prices locked in a tight range.
Trading was choppy between RM2,245 and RM2,276, falling in the early part of the session before gaining traction towards the midday break.
Market players say unfriendly weather likely curbed top grower Indonesia’s palm oil output in January by more than their estimates of 5 per cent, while neighbouring Malaysia could see an up to 12 per cent drop.
However, poor demand stifled price gains. Cargo surveyor Intertek Testing Services reported on Wednesday a 6.6 per cent fall in Malaysian shipments of palm oil between February 1 and 25 versus the same period in January, due to a steep decline in Chinese imports.
“People are talking about February production falling, that will bring down stocks. This nearby tightness is giving support to the market,” said a trader with a foreign commodities firm in Kuala Lumpur.
“Exports are down, too. From April onwards we should see stocks rising.”
By the midday break, the benchmark May contract on the Bursa Malaysia Derivatives Exchange had gained 0.5 per cent to RM2,269 per tonne.
Traded volume stood at 24,998 lots of 25 tonnes each, nearly double the usual 12,500 lots.
Though palm oil futures are heading for their second day of gains, traders said sentiment was uncertain, with most looking to a key industry meet in Kuala Lumpur next week for more clarity on the global market scene. — Reuters