Palm oil gains on stronger rival edible oils, favourable export data

JAKARTA: Malaysian palm oil futures ended higher on Monday, underpinned by stronger rival edible oils and crude oil, while favourable data on exports also lent support to the market.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 49 ringgit, or 1.17percent, to 4,224 ringgit (USD1,065.86) a metric ton at the close.

“Today, palm prices were supported by favourable January 1-25 export data and production,” a Kuala Lumpur-based trader said. Dalian’s most-active soyoil contract rose 1.66percent, while its palm oil contract gained 1.97percent.

Soyoil prices on the Chicago Board of Trade were up 0.24percent. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Cargo surveyor Intertek Testing Services said Malaysian palm oil product exports for January 1-25 rose 9.97percent compared to a month earlier, while according to independent inspection company AmSpec Agri Malaysia it rose 7.97 percent.

Oil prices extended gains after climbing more than 2percent in the previous session, as tensions between the US and Iran kept investors on edge even after Kazakhstan’s main export pipeline resumed full operations.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 1percent against the dollar, making the commodity more expensive for buyers holding foreign currencies.