Mumbai (Commodities Control) – Malaysian palm oil futures settled 6% higher on Wednesday after it opened more than 9% higher, its biggest intraday gain in 11 years. CPO on BMD declined sharply in the previous session on fears the fast-spreading coronavirus would curb demand from major importer China.
Although demand concerns continue to haunt the tropical oil that led to some profit-taking at higher levels.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange settled 6% or 153 Ringgit higher to close at 2728 Ringgit per tonne. It traded in the range of 2810-2653 Ringgits during Wednesday’s session.
It is to be noted that Indonesia will be levying export tax of $18/Ton on crude palm oil from February. The Indonesian Government has had to take such measures in order to contain CPO price rise in their markets. This in turn will result in demand being diverted to Malaysia that resulted in the spike in palm oil price, witnessed in today’s session.
In the previous sessions, however, CPO prices slid on concerns of demand deterioration from India and China. CPO price on BMD had slipped 10% in a single session, biggest intraday fall in 11 years.
Meanwhile CPO picked cues from bean and soy oil in international markets too. Chicago soybean futures edged higher as the market took a breather after dropping to a more than one-month low earlier this week, although gains were capped by concerns over China's demand.
SGS came out with palm oil exports report for the period from 1-25 January, during which Malaysian exports have dipped 4.8% at 1,015,226 tonnes as compared with similar period in December.
(Commodities Control Bureau)