JAKARTA, Feb 10 (Reuters) – Malaysian palm oil futures edged higher on Thursday in early trading on supply issues as major palm oil producer Indonesia expanded its export permit requirements for palm oil products.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange climbed 0.07% to 5,598 ringgit ($1,338.59) a tonne at the lunch break.

“Prices at high levels after Indonesia imposed restrictions on all products. Prices are rising mainly on hedge purchases, could fall again once permits are granted for exports,” a source told Reuters. trader based in Kuala Lumpur.

Indonesia has expanded its export permit requirement for palm oil products, where exporters must sell 20% of their planned exports in the country and with a price cap to include other derivative products , a Commerce Department regulation reviewed by Reuters showed on Wednesday. The regulation previously only applied to exports of crude palm oil, olein, used cooking oil and residues

Industry regulator Malaysian Palm Oil Board (MPOB) also showed on Thursday that the country’s ending palm oil stocks in January fell 3.85% to 1.55 million tonnes from the previous month. Read more

The Dalian soybean oil contract rose 1.37%, while the palm oil contract for May delivery gained 2.57%. Chicago Board of Trade soybean oil prices rose 0.33%.

Palm oil is affected by fluctuations in related oil prices as they compete for a share of the global vegetable oil market.

Palm oil could test resistance at 5,676 ringgits per tonne, a break above that could lead to a gain to 5,749 ringgits, Reuters technical analyst Wang Tao said.

($1 = RM4.1820)

Reporting by Fransiska Nangoy; Editing by Rashmi Aich

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