MUMBAI, 11 Sep (Commoditiescontrol): Malaysian crude palm oil (CPO) futures rebounded on Wednesday, driven by concerns over a weak production outlook and a rise in energy prices, which increased the biofuel appeal of palm oil. The benchmark November palm oil contract on the Bursa Malaysia Derivatives Exchange settled up 16 ringgit, or 0.41%, at 3,901 ringgit ($905.10) per metric ton.
Palm oil is reacting to moves in crude oil, although concerns about the pace of production in Malaysia are seen supporting the market.
On Tuesday, the Malaysian Palm Oil Board (MPOB) reported that palm oil stocks in the country rose by 7.34% at the end of August, reaching 1.88 million metric tons—the highest in six months. Crude palm oil production increased by 2.87% to 1.89 million metric tons, while exports fell by 9.74% to 1.53 million metric tons. Market analysts had predicted inventory levels at 1.86 million metric tons, with production at 1.89 million metric tons and exports at 1.5 million metric tons.
Despite the rebound, the market remains in a sideways trend as traders await more clarity, particularly regarding Indonesia’s palm oil export levy policy. Indonesia, the world’s largest palm oil exporter, is considering lowering export duties to boost competitiveness and improve farmers' incomes, which could impact global palm oil prices.
Analysts suggest that palm oil prices may break support at 3,856 ringgit per metric ton, potentially falling toward the 3,782-3,796 ringgit range if downward pressure persists.
Meanwhile, oil prices also rose on Wednesday, recovering some of the previous day's losses. Concerns over potential output disruptions in the U.S. due to Hurricane Francine outweighed worries about weak global demand, adding to the overall bullish sentiment in the palm oil market.
(By Commoditiescontrol Bureau; +91 98201 30172)
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