By Mei Mei Chu
KUALA LUMPUR, March 29 (Reuters) – Malaysian palm futures reversed early gains on Wednesday in anticipation of tightening production, although the rise was capped by a report highlighting the vegetable oil’s fading premium against rival oils.
Palm oil’s rare premium over rival rapeseed oil and sunflower oil is likely to be short-lived and should slip into a discount once top producer Indonesia eases export curbs after Ramadan, industry participants told Reuters on Tuesday.
The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange gained 22 ringgit, or 0.6%, to 3,709 ringgit ($839.90) a tonne.
Palm rose for a third straight session to its highest closing in one week.
Dalian’s most-active soyoil contract DBYcv1 rose 1.1%, while its palm oil contract DCPcv1 gained 1.2%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.04%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Production in the world’s second-largest producer is expected to decline after a miller’s association estimated a 22.9% decline in output during March 1-25, analysts said.
Exports from Malaysia during March 1-25 jumped between 11.4% and 19.8% from the same period in February, according to cargo surveyors’ data this week.
Top producer Indonesia plans to set its crude palm oil reference price for the April 1-15 period at $898.29 per tonne, Musdhalifah Machmud, a senior official at the Coordinating Ministry of Economic Affairs, said on Tuesday.
($1 = 4.4160 ringgit)
(Reporting by Mei Mei Chu; Editing by Savio D’Souza, Uttaresh Venkateshwaran and Louise Heavens)
((Meifong.chu@thomsonreuters.com))
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