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Malaysian palm oil price edges higher on easing stocks outlook

Malaysian palm oil price edges higher on easing stocks outlook

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.