JAKARTA: Malaysian palm oil futures closed higher on Wednesday, snapping two straight sessions of losses, supported by higher demand, a soyoil rally and the possibility of lower production in June.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 95 ringgit, or 2.39%, to 4,063 ringgit ($961.4) a metric ton at the close.
“Overall market sentiment has improved and demand has returned to normalcy. With our preliminary assessment on lower production in June and the soyoil rally, all helped palm prices to remain competitive,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
India’s palm oil imports soared to an 11-month high in June, driven by lower domestic inventories and a price discount to rivals soyoil and sunflower oil that encouraged refiners to ramp up purchases. Dalian’s most-active soyoil contract rose 0.63%, while its palm oil contract gained 1.52%. Soyoil prices on the Chicago Board of Trade were 1.12% higher. The ringgit, palm’s currency of trade, weakened 0.71% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
