Palm oil prices scale near two-month high as May exports rise
Malaysian palm oil futures rose to their highest level in nearly two months on Monday, supported by a rise in May exports and optimism over a recovery in demand.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 39 ringgit, or 1.7 per cent, to 2,331 ringgit ($540.33) a tonne by the midday break, its highest since April 9.
Palm oil jumped 10 per cent last month, its biggest monthly rise this year, as prices were boosted by hopes of lower output in May and resumption of purchases by India, the world's largest edible oil consumer.
"The market was drawing strength from May export numbers and better export outlook in June given the start of 0 per cent export tax," said Sathia Varqa, owner of Singapore-based Palm Oil Analytics.
Malaysia's exports rose between 7 per cent and 8.4 per cent in May from the month before, cargo surveyors said on Monday.
The world's biggest palm oil producers Indonesia and Malaysia have set export tax for crude palm oil at zero for June.
However, Indonesia will charge a blanket export levy of $55 per tonne on shipments from June 1 to raise funds for a domestic biodiesel programme.
"The crude palm oil market sentiment continued to be positive from the short week last week tracking rises in the equity market as countries begin to gradually open up from their coronavirus lockdowns," Varqa said.
Dalian's most-active soyoil contract rose 0.86 per cent, while its palm oil contract inched up 0.82 per cent. Soyoil prices on the Chicago Board of Trade were up 1.06 per cent.
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 rise into a range of 2,345-2,409 ringgit per tonne, as suggested by its wave pattern and a retracement analysis, Reuters technical analyst Wang Tao said.