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Malaysian palm oil futures rose on Tuesday (Dec 03, 2024), underpinned by supply concerns due to floods in peninsular Malaysia and a higher Indonesian export tax and levy in December. Still, an expected decline in November exports capped gains.
The Bursa Malaysia Derivatives Exchange's benchmark contract for February delivery was up RM32 or 0.65 percent, to RM4,987 (US$1,116.16) a metric ton by the midday break.
Supply concerns emerged as peninsular Malaysia was hit by floods that officials fear could be the worst in a decade, which could affect palm oil production, a Kuala Lumpur-based trader said.
The trader said that a higher export tax and levy by the world's biggest palm oil exporter Indonesia is also supporting prices.
Indonesia raised its crude palm oil (CPO) reference price for December to US$1,071.67 a metric tonne, from US$961.97 in November, which put the export tax higher at US$178 per tonne, from US$124 a tonne in November.
However, a likely decline in November exports weighed on the contract and slowed down the momentum, the trader said.
Malaysian palm oil exports in November are seen falling between 9.3 percent and 10.4 percent, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
"Going forward. high prices like this deter destination buyers. Exports starting to decline may see end stocks in December and January moving higher," the trader said.
Dalian's most active soy oil contract dropped 1.79 percent, while its palm oil contract climbed 0.08 percent. Soyoil shed 0.41 percent at the Chicago Board of Trade.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. Palm oil is expected to retest resistance at RM5,070 per tonne, a break above which could open the way towards the RM5,128-RM5,206 range, Reuters technical analyst Wang Tao said.
Source: Online/GFMM
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