Home Impact producer VEGOILS Palm Hits New High, Posts Sixth Weekly Gain as Indonesia Limits Exports

VEGOILS Palm Hits New High, Posts Sixth Weekly Gain as Indonesia Limits Exports

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JAKARTA, Jan 28 (Reuters) – Malaysian palm oil futures hit a new all-time high and a sixth weekly gain on Friday as Indonesia’s top producer curtailed exports amid lingering low production fears.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed at 5,633 ringgit ($1,345.03) a tonne, up 3.47% for the day.

It reached a new intraday high of 5,639 ringgits per ton.

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For the week, it rose 5.84% amid rising energy prices, supply issues and anticipation of changes in Indonesia’s export policy.

Indonesia, the world’s largest producer and exporter of palm oil, announced a 20% domestic sales mandate for palm oil on Thursday in a bid to lower local cooking oil prices. Read more

The share set for mandatory local sales was lower than the 25% previously forecast, traders said, but was a key factor in Friday’s gains.

“The market always takes this opportunity to create a new high,” said a trader in Kuala Lumpur.

Elsewhere, Chicago Board of Trade soybean oil prices rose 0.92%, while Dalian’s soybean oil contract for May delivery climbed 3.34% and its 2.45% palm oil.

Palm oil is affected by fluctuations in related oil prices as they compete for a share of the global vegetable oil market.

The Indonesian Palm Oil Association said it expected 2022 exports to be 3% below 2021 levels, but it was unclear whether the group had taken into account the new mandatory inside sales policy. Read more

Although GAPKI forecast an increase in production in 2022, the outlook must be reassessed after the first half of the year, as the scarcity of fertilizers and the wetter weather at the beginning of the year could impact the production of the second half of 2022.

($1 = 4.1880 ringgit)

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Reporting by Fransiska Nangoy; Editing by Subhranshu Sahu and Shinjini Ganguli

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