- Spot month contract surpasses 5,000 rgt/tonne
- September stocks seen falling as peak output season slows
KUALA LUMPUR: Malaysian palm oil futures closed at a record high on Wednesday, driven by a rally in crude prices and expectations of tighter supplies.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed up 133 ringgit, or 2.81%, at 4,871 ringgit a tonne ($1,165.03), marking its third consecutive day of gains.
The contract had climbed as much as 3%, while the spot month contract advanced to an all-time high of 5,067 ringgit ($1,216).
Rallies in soyoil and crude, and a global energy crisis underpinned the bullish scenario, said Paramalingam Supramaniam, director of Selangor-based brokerage Pelindung Bestari.
"The available end-stocks in Malaysia are relatively tight and market is also cognizant of the fact that we are almost entering into lean production months."
The Malaysian Palm Oil Association estimated September production fell 1.44% from the month before to 1.68 million tonnes, traders said.
Oil hit a multi-year high above $83 a barrel, supported by OPEC+'s refusal to ramp up production more rapidly against a backdrop of concern about tight energy supply globally.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Soyoil prices on the Chicago Board of Trade were up 0.5%, after jumping nearly 4% in the previous session. The Dalian exchange is closed until Thursday for a public holiday.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Indonesia conducted its first test flight using jet fuel partially from palm oil on Wednesday as the country plans to commercialize the fuel and seeks creative ways to use the edible oil domestically.