Palm oil touches near seven-month high tracking stronger soyoil

KUALA LUMPUR: Malaysian palm oil futures climbed as much as 3.2% on Tuesday, touching its highest in nearly seven months, tracking higher rival soyoil and buoyed by hopes of increased buying from India ahead of the Diwali festival.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed up 44 ringgit, or 1.61%, to 2,782 ringgit ($671.98) a tonne.

Palm oil logged a 2.3% monthly rise on Friday, its second straight monthly gain.

The contract moved up on strong Dalian prices and some upside in bean oil, a Kuala Lumpur-based trader said. "Looks like the market is disregarding weak exports... but people are worried [about demand]."

Exports of Malaysian palm oil products for August fell between 13%-15% from July, cargo surveyors said.

In top producer Indonesia, palm oil exports in 2020 is seen falling 18% from last year to 24.92 million tonnes, the country's Palm Oil Association (GAPKI) said on Tuesday. Production is seen at 46.02 million tonnes, down from 47.11 million tonnes in 2019.

However, some are hopeful of increased demand from India, the world's biggest cooking oil consumer, to replenish stockpiles in preparation for the Diwali festivities in November, traders said.

Dalian's most-active soyoil contract rose 0.57%, while its palm oil contract gained 1%. Soyoil prices on the Chicago Board of Trade were up 0.97%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.