KUALA LUMPUR: Malaysian palm oil futures rose on Tuesday, recovering from more than 2 percent losses in the previous two sessions, as it tracked gains in global crude oil prices and rival oilseed soy on the Chicago Board of Trade.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 0.9 percent to 2,715 ringgit ($645.97) a tonne at the midday break, its best intraday percentage gain in nearly two weeks.
Traded volumes stood at 17,004 lots of 25 tonnes each at noon.
"We're seeing some short covering today... There is also stronger crude oil prices," said a futures trader from Kuala Lumpur.
Oil prices extended gains on Tuesday, with Brent crude hitting a 26-month high, supported by Turkey's threat to cut crude flows from Iraq's Kurdistan region to the outside world.
Palm is impacted by movements in crude oil, as the tropical oil is used as feedstock for producing biodiesel, a fuel substitute.
A weaker ringgit also provided some support, the trader said.
The ringgit, the currency palm oil is traded in, fell as much as 0.2 percent in early trade to 4.2100, its weakest since Sept. 7. Weakeness in the ringgit makes palm oil cheaper for holders of foreign currencies.
The October soybean oil contract on the Chicago Board of Trade was up 0.2 percent, while the January soybean oil contract on the Dalian Commodity Exchange fell 0.3 percent.
The price direction of related edible oils including soy affects palm oil, as they compete for a share of the global vegetable oils market.
In other related oils, the January palm olein contract dropped 0.2 percent.
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