Malaysian palm oil futures gained for a second straight session on Monday, underpinned by bargain buying and data indicating a slower rate of decline in February exports amid hopes that Chinese demand will recover from the effects of coronavirus.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed up 23 ringgit, or 0.88%, at 2,650 ringgit ($640.41). Palm oil fell 5.4% last week on lower exports to the vegetable oil’s two largest markets, India and China.
India, the world’s top palm oil buyer, last month imposed restrictions on imports of refined palm oil from Malaysia, while the coronavirus outbreak in China exacerbated demand worries.
However, a slower rate of decline in February exports eased concerns about falling demand in China in the wake of the coronavirus epidemic, a Kuala Lumpur-based trader said. “The market is hopeful that Chinese buying may come in,” he said.
Malaysia palm oil exports between Feb. 1 and 15 dropped 6.7%-10% from a month before, according to cargo surveyors, compared with the 20%-29.4% drop over the Feb. 1-10 period.
China’s central bank on Monday lowered one of its key interest rates and injected more liquidity into the system to support an economy jolted by the epidemic. Palm oil was also supported by bargain hunting and gains in Dalian vegetable oils, the trader said.
Dalian’s most-active soyaoil contract traded up 0.6%, while its palm oil contract gained 1.56%. The Chicago Board of Trade was closed for a public holiday. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Copyright Reuters, 2020
Source : Business Recorder