KUALA LUMPUR: Malaysian palm oil futures climbed more than 3% to hit a six-week high on Thursday, lifted by higher exports so far in July, while dry weather and a labour shortage hitting global production of vegetable oils also boosted sentiment.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange climbed 136 ringgit, or 3.38%, to 4,157 ringgit ($989.53) a tonne.
Palm rose for a third straight session to its highest closing since June 3.
“Culmination of higher palm and bean oil trade on Dalian, a weaker ringgit, supportive sentiments, and soaring exports are rocking prices higher today,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Malaysia’s exports during July 1-15 rose about 5% from the same period in June, cargo surveyors said.
Dry weather in the U.S Midwest crop belt threatening production has been supporting prices of Chicago soyabean futures, while palm oil production in Malaysia is also expected to remain constrained due to labour shortage and coronavirus-led lockdowns.
Soyaoil prices on the Chicago Board of Trade rose 0.7%. Dalian’s most-active soyaoil contract gained 1.3%, while its palm oil contract jumped 2.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The ringgit, palm’s currency of trade, fell 0.05% against the dollar after Malaysia reported a new daily record of 13,215 new coronavirus cases. This makes the commodity cheaper for holders of foreign currency.