KUALA LUMPUR: Malaysian palm oil futures rose from a three-year low on Friday evening, snapping three days of declines thanks to bullish price outlooks and gains in related edible oils.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was up 0.4 per cent at 2,153 ringgit ($517.55) a tonne by the close of trade, up 0.2pc for the week.
It had earlier dropped by as much as 1.7pc to 2,108 ringgit, its lowest since September 2015. Trading volumes stood at 44,701 lots of 25 tonnes each at the end of the trading day.
“The market reversed earlier losses on the analysts’ comments. The Malaysian budget report was also supportive,” said one Kuala Lumpur-based futures trader. The trader added that current gains in soyoil on the US Chicago Board of Trade also supported palm oil.
Leading analysts at an industry conference on Friday forecast improving palm prices next year, predicting slower output growth while China shifts some of its vegetable oil demand to palm because of the country’s trade dispute with the United States.
Prices are already near the bottom for palm oil, said Dorab Mistry, while James Fry said it should rise to 2,450 ringgit by June as Malaysian inventories drop.
Meanwhile, palm and soyoil prices are seen rising by $50 to $100 a tonne in the next nine months as palm stockpiles dwindle, said Thomas Mielke, another analyst.
In its budget announcement on Friday, the Malaysian government also raised its price forecast for palm oil next year, expecting an average of 2,400 ringgit in 2019 versus 2,300 ringgit this year.
Published in Dawn, November 3rd, 2018