KUALA LUMPUR: Malaysian palm oil futures climbed for a second straight session on Tuesday, hitting their highest closing in 18 days, as they track rival Dalian and Chicago edible oils and crude oil futures.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 83 ringgit, or 2%, to 4,223 ringgit ($937.40) a tonne, hitting its highest closing since Nov. 11.
“The bullish sentiments are driven by sharply higher Chicago soy oil futures overnight, a rally in Chinese vegetable oil futures and rebounding energy prices,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Market participants are now awaiting Indonesia’s palm oil export duty and levy for the Dec. 1-15 period, he said.
Refinitiv Agriculture Research said in a note late on Monday that market fundamentals remained bullish on prospects of higher exports and lower output.
Dalian’s most-active soyoil contract rose 3%, while its palm oil contract gained 4.1%. Soyoil prices on the Chicago Board of Trade extended a 2% overnight jump.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil jumped, buoyed by hopes that China would relax its COVID-19 controls after rare protests against the country’s zero-COVID strategy over the weekend in big Chinese cities.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Global commodities markets were hit on Monday by worries over rare demonstrations in China against COVID-19 curbs, adding a new political dimension to investor concerns just as global economic headwinds mount and recession fears grow.