SINGAPORE: Malaysian palm oil futures rose over 4% on Monday, bouncing back from last session’s losses and reaching their highest in more than a month, as crude oil and the ringgit gained while exports in February improved.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose 162 ringgit, or 4.6%, to 3,720 ringgit ($922.62) a tonne.
The contract reached its highest price in more than a month, when it hit 3,740 ringgit on Jan. 13.
“Palm oil futures are trading higher following bullish sentiments in crude oil prices.” said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.
Oil prices soared on Monday to their highest in about 13 months as fears of heightened tensions in the Middle East prompted fresh buying, while hopes a US stimulus and an easing of lockdowns will buoy fuel demand provided support.
Higher crude oil prices increase demand for palm oil as a feedstock for biodiesel. Top palm producer Indonesia requires its diesel to be blended with at least 30% of bio-content made up of palm.
Meanwhile, the ringgit gained 0.2% against the dollar, making the edible oil a more attractive option for holders of foreign currency. Further supporting prices were higher exports in February. Malaysian palm oil product exports for February 1-15 rose 27.4% to 530,545 tonnes from 416,565 tonnes shipped during January 1-15, cargo surveyor Intertek Testing Services said on Monday.