By Mei Mei Chu
KUALA LUMPUR, Dec 16 (Reuters) – Malaysian palm oil futures jumped on Thursday, recovering from the previous session’s steep decline, as it tracked strength in rival soyoil, while concerns about tightening production also supported sentiment.
The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange gained 89 ringgit, or 2.09%, to 4,355 ringgit ($1,029.79) by the midday break.
It had plunged 4.5% on Wednesday after cargo surveyors reported a larger-than-expected drop in exports during the first half of December.
Exports of Malaysian palm oil products for Dec. 1-15 fell 13.4% to 789,549 tonnes from the same period in November, cargo surveyor Societe Generale de Surveillance said.
Preliminary polls suggest a widespread decline in palm fruit harvesting in Peninsula Malaysia during Dec. 1-15, with planters reporting production decline of around 10%, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“The decline in both fresh fruit bunch and production should be able to cushion further declines today, demand worries will cap gains,” he said.
Dalian’s most-active soyoil contract DBYcv1 fell 0.3% while its palm oil contract DCPcv1 slipped 0.5%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.2% after jumping 2.5% overnight.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices rose as the United States implied consumer petroleum demand surged to a record high in the world’s top oil consumer even as the Omicron variant of coronavirus threatens to dent oil consumption globally. O/R
Stronger crude oil futures typically make palm a more attractive option for biodiesel feedstock.
Palm oil may stabilise around a support at 4,298 ringgit per tonne and start a decent bounce thereafter, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.2290 ringgit)
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(Reporting by Mei Mei Chu; Editing by Rashmi Aich)
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