-- Malaysian palm oil futures inched up on Monday as crude oil and Chicago soybean oil rose, reaching one-week highs despite bearish fundamentals.
The Bursa Malaysia Derivatives' June crude palm oil contract edged higher by 1.19% to 4,594 Malaysian ringgit ($1,162.30) per metric ton. The July contract gained 1.23% to 4,626 ringgit/mt in midday trade.
Trading resumed following a public holiday on May 1, but related news were limited as the China market remained closed for May Day holidays. The Dalian exchange is set to open on May 6.
A 15.7% to 16.8% month-over-month decline in Malaysian shipments for the April 1-25 period, as reportedly estimated by cargo surveyors, continued to cap price gains. Malaysia's industry body will release monthly data on May 11.
Lower exports in April reflect a typical post-festive weakness, according to Trading Economics. In March, exports jumped 40.7% from a month earlier, industry data showed, as buyers advanced purchases due to the expected surge in shipping costs and as volumes of rival Indonesian cargoes softened due to higher export levies.
With a recent strengthening in the local currency, export demand may remain under pressure due to rising costs for foreign buyers.
Indonesia's planned increase in biodiesel blend to 50% from the current 40% will reduce exportable supplies and may improve competitiveness of Malaysian cargoes.
Lower palm oil supplies to the global market could also happen if Indonesian output declines due to concerns over the El Nino weather phenomenon and rising fertilizer cost. Eddy Martono, chairman of the Indonesian Palm Oil Association, cautioned of a possible 1 million to 2 million tons drop in Indonesian production this year, relative to 2025 levels, Reuters reported.
Meanwhile, in the near term, production in Indonesia and Malaysia may still rise versus Q1 lows due to seasonal factors.