Palm oil reverses after 4 days of losses as exports increase


PALM oil snapped a four-day losing streak as Brent crude oil steadied and traders assessed signs of stronger export demand.

Futures for May delivery rose as much as 3.7% to RM6,359 a tonne, the biggest intraday gain in a week, before closing at RM6,335.

The June palm oil contract, which has the highest volume, climbed as much as 4.8%.

Prices are being supported by the recovery in crude oil and stronger Dalian vegetable oil markets, according to Sathia Varqa, owner of Palm Oil Analytics in Singapore.

Demand from the Middle East and China will also remain strong in March, which will bolster Malaysian exports, he said.

Cargo surveyor data showed Malaysian palm oil exports rose between 13% and 16% in the first half of March from a month ago.

Shipments jumped more than 600% to Turkey and 559% to the rest of the Middle East, and were up 120% to China, according to SGS Malaysia Sdn Bhd.

The surge in cargoes to Turkey and Middle East likely reflects the disruption to sunflower oil exports from the Black Sea.

Still, palm oil has erased most of its gains since the start of Russia’s invasion of Ukraine, staying well below the record RM7,268 hit last week.

The focus has shifted to the outlook for higher production this month, Varqa said.

Investors are also watching for potential policy changes in Indonesia, which is seeking to cool local cooking oil prices.

The government announced a rule last week requiring exporters to allocate more supply for the domestic market.

On Tuesday, Indonesia said it would use funds from its palm oil levy — which is used to fund its biodiesel programme — to subsidise bulk cooking oil.