JAKARTA: Malaysian palm oil futures gained for a second straight session on Tuesday, following crude oil prices that continued to climb.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 33 ringgit, or 0.68percent, at 4,883 ringgit (USD1,196.08) a metric ton at close.
Malaysia’s financial markets will be closed on Wednesday for a public holiday. Trading will resume on Thursday, September 17.
“BMD CPO futures were seen trading higher today following gains in energy prices,” said Anilkumar Bagani, research head at the Mumbai-based vegetable oil broker Sunvin Group.
He added that additional support came from expectations of tightness next year due to Indonesia’s B50 biodiesel mandate and a potential production reduction due to El Niño.
Oil prices rose more than 2percent on Tuesday after attacks on Saudi Arabian energy infrastructure left the kingdom’s East-West pipeline offline, raising fears that damage to energy infrastructure and transport routes could take longer to repair.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. Dalian’s most-active soyoil contract dropped 1.07percent, while its palm oil contract shed 0.46percent. Soyoil prices on the Chicago Board of Trade were up 0.58percent.
Palm oil tracks rival edible oils, as it competes for a share of the global vegetable oils market. Malaysia has raised its October crude palm oil reference price to a level that maintains the export duty at 10percent, a circular on the Malaysian Palm Oil Board website showed on Tuesday.
Cargo surveyors estimated that exports of Malaysian palm oil products for September 1 to 15 fell between 17.8percent and 25.6percent from a month earlier. India’s palm oil imports in August rose 7percent from July to 782,761 metric tons, the Solvent Extractors’ Association of India (SEA) said on Tuesday.
The ringgit, palm’s currency of trade, weakened 0.21percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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