KUALA LUMPUR: Malaysian palm oil futures rose nearly 1 percent in early trade on Monday, in line for a second consecutive session of gains, as the market was supported by strength in related edible oils and firm demand.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 0.95 percent at 2,448 ringgit ($634.03) a tonne at the midday break. It rose to 2,451 ringgit earlier in the day, its strongest level since March 22.
Trading volumes stood at 17,915 lots of 25 tonnes each at
the midday break.
"Soyoil is higher and Dalian is also up," said a palm oil futures trader based in Singapore, referring to strong gains in soyoil on the US Chicago Board of Trade and related oils on China's Dalian Commodity Exchange.
"Demand is encouraging, we believe exports will continue to be strong to the Middle East for Ramadan," added the trader.
The Muslim holy month of Ramadan begins in mid-May this year, and incurs higher usage of cooking oil as devotees break day-long fasts with communal feasting. Palm oil is commonly used to make cooking oil, and demand for it in Muslim populated regions grows a month ahead of Ramadan.
Malaysian palm oil shipments for March rose 21.6 percent versus the previous month, according to data from inspection company AmSpec Agri Malaysia on Saturday.
In related oils, the Chicago Board of Trade's May soybean oil contract rose 1 percent to its highest in over a week after the US Department of Agriculture projected a year-on-year decline in soybean plantings.
Meanwhile, the May soybean oil on China's Dalian Commodity Exchange jumped 1.7 percent and the Dalian May palm oil contract rose 0.9 percent.
Palm oil prices are impacted by movements in rival edible oils as they compete in the global vegetable oils market.
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