Palm recovers slightly on firmer Dalian, India duty cut

KUALA LUMPUR: Malaysian palm oil futures opened slightly higher on Thursday after four straight sessions of losses, supported by stronger rival Dalian oils and by India's decision to cut import duty.

The gains were limited, however, by weaker Chicago soyoil and lower crude oil prices, which reduced support for palm oil, used both in food and as a biofuel.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained RM11, or 0.23 per cent, to RM4,779 (US$1,170.75) a metric ton in early trade.

Dalian's most-active soyoil contract rose 0.22 per cent, while its palm oil contract added 0.47 per cent. Soyoil prices on the Chicago Board of Trade were down 0.44 per cent.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Oil prices edged lower, after climbing four per cent in the previous session, as Iran said it remained open to diplomacy to end the US-Iran war, though the two countries remain far apart on ways to do so.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The ringgit, palm's currency of trade, weakened 0.05 per cent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

India has cut the basic import duty on crude and refined edible oils, including palm oil, soyoil and sunflower oil, the government said late on Wednesday, as it seeks to lower prices during the peak festive season.

Palm oil may retest support at RM4,732 per ton, a break below which may trigger a fall into the RM4,677 to RM4,711 range, Reuters technical analyst Wang Tao said.

Debt markets were on edge on Thursday, as Japanese bonds followed Treasuries lower, while Asian equities were mixed as investors weighed simmering Middle East tensions and prospects for talks between the United States and China.