KUALA LUMPUR, Malaysia, January 3 (Reuters) – Market participants expect tight output in the first half of 2022 to help lift Malaysian palm oil futures higher on Monday, kicking off the new year on a high note.
Initial trading on the Bursa Malaysia Derivatives Exchange saw the benchmark palm oil contract FCPOc3 for March delivery rise 100 ringgit, or 2.13 percent, to 4,797 ringgit ($1,150.64) a tonne in the first hour of trading.
Earlier this week, Palm reported its third consecutive year gain, with the stock expected to rise 30.7 percent in 2021 as a pandemic-fueled labour shortage hampered supply in the world’s second-largest producer but demand increased as governments lifted their lockdowns. This year, prices are expected to average roughly 4,149.57 ringgit ($995.34) on average.
* According to a trader located in Kuala Lumpur, concerns about flooding hurting output are likely to set in and dampen the selling activity observed last week.
On the Chicago Board of Trade BOcv1, soybean oil prices were up 0.58 percent for the day. The Dalian Commodity Exchange will be closed on Monday, January 1, in observance of the Chinese New Year holiday.
* Palm oil’s price is influenced by the price movements of related oils, which are in competition for a part of the worldwide vegetable oils market.
* According to the Council of Palm Oil Producing Countries, palm oil prices are projected to remain robust in 2022 as production is expected to remain restrained due to rising fertiliser costs and long-standing labour shortages.
* Oil prices climbed as the market began the year 2022 on a good note, while concerns about demand dwindling as a result of the rapidly spreading COVID-19 epidemic curtailed the market’s progress. O/R
In the face of stronger crude oil futures, palm oil is becoming a more viable choice for use as a biodiesel feedstock.
* Palm oil is trading in a band of 4,676 ringgit to 4,751 ringgit per tonne, and an escape from this range could indicate a change in direction, according to Reuters technical analyst Wang Tao. TECH/C