Palm extends gains after Indonesia limits exports

January 28, 2022: Malaysian palm oil futures extended gains on Friday to a fourth session, putting the benchmark contract on course for a sixth straight weekly rise, as top producer Indonesia limited exports.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 0.92% to 5,494 ringgit ($1,309.03) per tonne in early trade. It had gained 0.77% in overnight trade.

FUNDAMENTALS

Indonesia, the world's biggest palm oil producer and exporter, on Thursday, announced a 20% mandatory domestic sales for palm oil in a bid to cool down local cooking oil prices.

Meanwhile, Indonesia is expected to produce 49 million tonnes of crude palm oil in 2022, compared with an estimated 46.89 million tonnes in 2021, the Indonesia Palm Oil Association said.

Dalian's most-active soyoil contract rose 2.04%, while its palm oil contract gained 1.55%. Soyoil prices on the Chicago Board of Trade were up 0.26%.

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

Palm oil may test a resistance at 5,585 ringgit per tonne, a break above which could lead to a gain into the 5,608-5,676 ringgit range, Reuters technical analyst Wang Tao said.

Reuters