KUALA LUMPUR: Malaysian palm oil futures ticked up on Wednesday for a second straight session, supported by gains in rival Dalian oils and a weaker ringgit, which boosted the commodity’s appeal in key export markets.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 23 ringgit, or 0.54%, to 4,277 ringgit ($1,009.92) a metric ton at the close.
Crude palm oil futures traded higher, driven by bullish signals, including the overnight surge in Chicago soyoil and energy futures and strong Chinese vegetable oil futures during Asian hours, said Anilkumar Bagani, research head at Sunvin Group.
“The weakening ringgit also enhanced export competitiveness for ringgit-denominated CPO contracts,” he added. However, Bagani said China’s increased exports of competitively priced soybean oil to India pose a substitution risk, which could weigh on regional palm oil demand.
Indian importers bought a record 150,000 metric tons of soyoil from China in rare purchases, as a supply glut prompted Chinese crushers to offer a discount to India’s South American suppliers. Dalian’s most-active soyoil contract rose 0.81%, while its palm oil contract added 0.63%.
Soyoil prices on the Chicago Board of Trade were down 0.62%. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.09% against the US dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Oil prices dipped slightly as investors awaited developments on US President Donald Trump’s tighter deadline for Russia to end the war in Ukraine and his tariff threats to countries that trade its oil. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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