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BMD CPO Set To Snap 5-Day Losing Streak On Short-Covering, Stronger US Soyoil

20 Jan 2020 11:29 am
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MUMBAI (Commoditiescontrol) - Malaysian palm oil futures moved higher in the first session of trade on Monday, in line to snap their 5-day losing streak due to short-covering and tracking rally in US soyoil futures.

The April benchmark crude palm oil contract on the Bursa Malaysia Derivatives Exchange (BMD), was up 33 Ringgit at 2,870 Ringgit a tonne at the midday break after moving in the range of 2,879 Ringgit and 2,846 Ringgit a tonne. It fell 9.2 percent last week, its worst weekly decline since October 2008.

Malaysian Prime Minister Mahathir Mohamad's statement that Malaysia will not take retaliatory trade action against India over its boycott of palm oil purchases, also boosted sentiment.

"We are too small to take retaliatory action," Dr Mahathir told reporters in Langkawi, a resort island off the western coast of Malaysia. "We have to find ways and means to overcome that," he added.

India, the world's largest edible oil buyer, this month effectively halted imports from its largest supplier and the world's second-biggest producer in response to comments from Dr Mahathir attacking India's domestic policies.

In other related oils, US March soyoil futures on e-CBOT were trading 0.97 percent higher on Monday amid expectations of increased export demand for US supplies after the signing of a US-China Phase 1 trade deal.

In the long-anticipated conclusion of a Phase 1 trade deal with Washington on last Wednesday, Beijing committed to increase purchases of US farm products by USD 32 billion over two years.

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

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