KUALA LUMPUR: Malaysian palm oil futures rose in the first half of trade on Thursday, tracking stronger crude oil prices and overnight gains in soyoil on the U.S. Chicago Board of Trade (CBOT).
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was up 0.7 percent at 2,029 ringgit ($484.60) a tonne at the midday break, in line for a second straight winning day after three earlier sessions of losses.
The market, however, is down 5.7 percent so far in November, and had earlier fallen to an over three-year low of 1,940 ringgit on Tuesday, hit by weak demand and after the world's top exporter Indonesia said it would temporarily remove a levy on palm oil.
Trading volumes stood at 12,253 lots of 25 tonnes each at the midday break. <1FCPO-TOT>
"The market is tracking the sharp rise in overnight CBOT, and higher crude oil today," said a Kuala Lumpur-based futures trader, who added that technical buying also lent support to palm.
Palm oil prices are impacted by movements in crude oil, as the edible oil is used as feedstock to make biodiesel.
Oil prices ticked higher on Thursday on optimism that trade talks at the G20 meeting could aid the global economy and improve the demand outlook, while an increase in U.S. crude inventories to their highest in a year curbed gains.
Palm is also affected by movements of other edible oils as they compete for a share in the global vegetable oil market.
The Chicago December soybean oil contract had risen more than 2 percent on Wednesday, in line with soybean gains as traders short covered while waiting to see if U.S.-China talks
at the G20 summit will defuse a trade dispute that has choked U.S. soybean exports to China.
Chicago soyoil prices were last slightly down 0.1 percent.
In other related edible oils, the January soybean oil contract on the Dalian Commodity Exchange was up 0.4 percent, while the January palm oil contract gained 1.9 percent.
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