Palm oil opens up tracking Chicago soyoil, weaker ringgit

KUALA LUMPUR: Malaysian palm oil futures rose on Friday, tracking gains in the Chicago soyoil contract and a weaker ringgit.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 70 ringgit, or 1.67%, to 4,252 ringgit ($1,004.49) a metric ton during early trade.

Palm oil down on weak Chicago soyoil; firmer crude oil

The contract has so far gained 3.23% this week.

Fundamentals

• Soyoil prices on the Chicago Board of Trade were up 0.47%. Dalian’s vegetable oil markets were closed for China’s Golden Week holiday.

• Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.

• The ringgit, palm’s currency of trade, weakened 0.33% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

• Oil prices rose in early Asian trade, holding on to their strong weekly gains, as investors weighed the Middle East conflict and potential disruptions in crude flows against an amply-supplied global market.

• Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

• India’s palm oil imports in September fell by nearly a third compared to the previous month, hitting a six-month low as a surge in tropical oil prices made it more expensive than rival oils, forcing refiners to postpone purchases, dealers said.

• India on Thursday approved a 101 billion-rupee ($1.2 billion) programme to double edible oil production within seven years, aiming to reduce dependence on costlier imports.