JAKARTA: Malaysian palm oil futures rose on Tuesday, tracking stronger rival vegetable oils, with the benchmark contract recouping some of the losses from the previous three sessions amid bargain hunting.
The contract for October delivery on the Bursa Malaysia Derivatives Exchange climbed 3.89% to close the afternoon trade at 3,788 ringgit ($850.47) per tonne.
Palm oil rebounded due to “spillover strength from external markets”, a trader in Kuala Lumpur said.
Dalian’s most-active soyoil contract rose 3.29%, while its palm oil contract gained 4.09%. Soyoil prices on the Chicago Board of Trade were traded 1.97% higher.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Crude oil prices rose on Tuesday for a second day on increasing concerns about tightening European supply after Russia, a key oil and natural gas supplier to the region, cut gas supply through a major pipeline.
Stronger crude oil prices make palm oil more attractive as a feedstock for biodiesel.
Another trader said palm oil was helped by bargain hunting as its recent losses had put its prices at a steep discount compared to other vegetable oils, such as soybean oil.
The Malaysian benchmark palm oil contract had dropped nearly 23% so far in July as rival Indonesia increased efforts to boost exports.