Malaysian palm oil price edges higher on easing stocks outlook

  • Business
  • Monday, 04 Feb 2019

Indonesia, the world's top exporter of palm oil, will not collect levies from palm exporters when prices are below a threshold of $570 per tonne, but will charge $10-$25 once prices are in a range of $570-$619 per tonne. The range will rise to $20-$50 when prices hit above $619 per tonne.

KUALA LUMPUR: Malaysian palm oil futures rose on Monday, charting a third session of gains in five, on the back of expectations of easing inventory levels.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.3 percent at 2,306 ringgit ($563.68) a tonne at noon, after earlier hitting a high of 2,313 ringgit.

Trading volumes stood at 5,327 lots of 25 tonnes each at noon.

"The market is expecting a drop in stock levels," said a Kuala Lumpur-based trader, referring to palm inventories in Malaysia, the world's second-largest producer.

Palm oil inventories in December rose 6.9 percent to 3.21 million tonnes, the highest in nearly two decades. It likely eased in January in line with a drop in seasonal output.

Malaysian markets were closed from the afternoon session for the Lunar New Year holiday and will reopen on Thursday.

In other related oils, the Chicago March soybean oil contract slipped 0.03 percent.

China's Dalian Commodity Exchange is closed for the Lunar New Year.

Palm oil prices are affected by movements in soyoil rates, as they compete for a share in the global vegetable oil market. - Reuters

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