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BMD CPO ends over 2% higher on Indonesia policy, firm energy prices

27 Jan 2022 6:09 pm
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NEW DELHI, Jan 27 (Commoditiescontrol) - Malaysian palm oil futures ended over 2 percent higher on Thursday, as top producer Indonesia imposed mandatory domestic sales and high energy rates boosted prices of the vegetable oil.

The April benchmark crude palm oil contract on the Bursa Malaysia Derivatives Exchange (BMD), was up Ringgit 112 or 2.10 percent at Ringgit 5,441 ($1,297.02) per tonne by the close. The contract rose as much as 3.17 percent during the session to hit an all-time high of 5,500 ringgit a tonne before cooling towards the closing level.

The world's top palm oil producer Indonesia on Thursday announced all cooking oil producers will be required to sell 20% of their planned export to the domestic market.

Prior to the Indonesian policy announcement, palm oil was also supported by rising tension between Russia and Ukraine, which had pulled crude oil, and in turn edible oil, prices up.

Globally, Dalian's palm oil contract gained 2.87% and its most-active soyoil contract rose 2.23%. On the Chicago Board of Trade (CBOT), soyoil prices were up 0.36% in electronic trade.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

In the energy market, oil prices fell as investors cashed in profits from the 2% gains in the previous session after the U.S. Federal Reserve indicated an interest rate hike in March, leading to correction in surging energy markets.

Crude oil prices affect palm oil, as it is an option for biodiesel feedstock.

The Fed's signal also weakened emerging market currencies, including the Malaysian ringgit, which helped palm prices go higher. Weaker ringgit makes palm more attractive for foreign buyers.

(By Commoditiescontrol Bureau)


       
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