KUALA LUMPUR: Malaysian palm oil futures rose to a week’s high on Wednesday, buoyed by strong demand from top buyer India and higher crude prices that make palm an attractive option for biodiesel feedstock.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 154 ringgit, or 4.12%, to 3,891 ringgit ($855.16) a tonne, extending gains to a second session.
India’s palm oil imports in 2022/23 could jump 9% from a year earlier due to a rise in domestic consumption and as competitive prices allow the tropical oil to regain its share in the world’s biggest market, a Reuters survey showed.
Exports of Malaysian palm oil products for Sept. 1-20 rose 32.7% to 952,888 tonnes from 718,291 tonnes shipped during Aug. 1-20, cargo surveyor Societe Generale de Surveillance (SGS) said.
SGS data also showed shipments to India surged 50% during the period as the world’s biggest edible oil buyer ramped up purchases ahead of the Diwali festival next month.
Malaysia is in the peak harvest season and production is expected to rise this month.
The current increase in open position from over the past week is a litmus test of the overall production fear both in Malaysia and Indonesia, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Dalian’s most-active soyoil contract rose 2.3%, while its palm oil contract gained 3.1%. Soyoil prices on the Chicago Board of Trade were up 1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil jumped more than 2% after Russian President Vladimir Putin announced a partial military mobilisation, escalating the war in Ukraine and raising concerns of tighter oil and gas supply.
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