Mumbai, 13 March (Commoditiescontrol) Prices, of palm oil ended at the highest level in over a year on Wednesday, as strength in rival edible oils and firmer crude oil prices underpinned the market.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives (BMD) Exchange closed up 67 ringgit, or 1.62%, to 4,196 ringgit ($895.43), its highest closing since March 9, 2023, when it exceeded the 4,200 ringgit mark.
The contract earlier logged a minor uptick, driven by the diminishing appeal of palm oil's relative value to other edible oils, a market analyst said.
"Considering the anticipated rise in production (of palm oil), it appears that we are approaching a short-term price cap at the current market levels," he added.
Dalian's most-active soyoil contract gained 0.6% higher, while its palm oil contract added 1.02%. Soyoil prices on the Chicago Board of Trade were up 0.5%.
Palm oil normally takes directions from the price movements in related oils as they compete for a share in the global vegetable oils market.
Crude oil rose on Wednesday, supported by signs of strong global demand including from top consumer the United States while hopes that the Federal Reserve might start cutting rates soon also buoyed sentiment despite somewhat sticky U.S. inflation. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Malaysia's palm oil stocks at the end of February dwindled to their lowest levels in seven months as production hit a 10-month low, offsetting the slowdown in exports.
Inventories at the end of last month fell 5% to 1.92 million metric tons from levels seen in January, crude palm oil production declined 10.18% to 1.26 million tons, while exports plunged 24.75%, data from industry regulator the Malaysian Palm Oil Board showed on Monday.
The Malaysian ringgit fell 0.24% against the dollar, making the commodity less expensigve for buyers holding the foreign currency.
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