JAKARTA: Malaysian palm oil futures climbed for a second straight session on Tuesday, underpinned by strength in rival edible oils in the Chicago and Dalian markets, while higher crude oil prices also lent support.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 40 ringgit, or 0.88percent, to 4,573 ringgit (USD1,121.93) a metric ton at closing.
“Strong overnight gains in WTI crude oil and Chicago soybean oil provided positive support to market sentiment,” a Kuala Lumpur-based trader said.
Chicago Board of Trade soyoil prices were up 0.47percent after a 3.35percent surge overnight. Dalian’s most-active soyoil contract rose 0.4percent, while its palm oil contract was up 0.95percent. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices rose on Tuesday to their highest in four weeks, after the US reimposed a naval blockade of Iran, while renewed attacks between Washington and Tehran heightened concerns over energy flows through the Strait of Hormuz.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.2percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
India’s palm oil imports fell to a 14-month low in June as demand collapsed and a narrowing discount to rival oils prompted buyers to cut purchases, a leading industry body said on Tuesday. EU imports of palm oil derivatives will face the bloc’s anti-deforestation rules from December 2027, while leather will be exempted from the law, the European Commission said on Monday.
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