Malaysian palm oil futures recorded their best day in three weeks on Thursday after top-producer Indonesia confirmed the extension of export controls, though a plunge in India’s edible oil imports capped gains.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange rose 92 ringgit, or 2.5%, to 3,780 ringgit ($795.79) a metric ton at closing.
“Palm oil opened the gap higher today after Indonesia announced that they are keeping the domestic market obligation (DMO) policy until 2024,” said Anilkumar Bagani, commodity research head of Suvin Group in India.
Indonesia’sTrade Ministry official Isy Karim made an official announcement on Thursday to confirm this extension.
The country imposed the DMO policy last year to control soaring prices. Under it, producers can export only once they have sold a portion of their products in the domestic market.
India’s edible oil imports in October plunged to a 16-month low as higher stocks prompted refiners to curtail palm oil, soyoil and sunflower oil purchases, dealers told.
Lower purchases by the world’s top importer of vegetable oils could push up palm oil stockpiles in key producers Indonesia and Malaysia.
Crude oil gained 1% on Thursday to snap a three-day decline, after the U.S. Federal Reserve kept benchmark interest rates on hold.
Stronger crude makes palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract DBYcv1 rose 2%, while its palm oil contract DCPcv1 was up 2.9%. Soyoil prices on the Chicago Board of Trade BOcv1 climbed 1% after hitting a five-month low in the previous session.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The Malaysian ringgit MYR=, palm’s currency of trade, strengthened 0.4% and was set for its best day since July 31.