JAKARTA: Malaysian palm oil futures rose more than 2percent on Monday, its biggest daily gain since March 30, underpinned by strength in Dalian vegetable oils, Chicago soyoil and crude oil, while a weaker ringgit also lent support to prices.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 96 ringgit, or 2.16percent, to 4,533 ringgit (USD1,140.66) a metric ton at closing, rising for a second straight session.
The contract fell 1.89percent last week in its third consecutive weekly drop. Strength in crude oil, good gains in Chicago soyoil, and a weaker ringgit lifted the market, said a Kuala Lumpur-based trader, adding that a technical rebound from recent falls lent further support.
Oil prices extended gains on Monday, driven by increasingly bleak prospects for peace in the Middle East after an attack on a nuclear power plant in the United Arab Emirates. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract barely changed, up 0.08percent, while its palm oil contract gained 1.55 percent. Soyoil prices on the Chicago Board of Trade were up 1.4percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Malaysia has lowered its June crude palm oil reference price to a level that maintains the export duty at 10percent.
Malaysian palm oil exports for the May 1-15 period were expected to have fallen by 16.5percent from a month earlier, data from inspection company AmSpec Agri Malaysia showed.
The ringgit, palm’s currency of trade, weakened 0.68percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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