Palm oil closes at highest in four months tracking rival oils

JAKARTA: Malaysian palm oil futures closed at their highest level in more than four months on Monday, supported by strength in rival oils on the Dalian and Chicago exchanges.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 47 ringgit, or 1%, to settle at 4,724 ringgit ($1,155.58) a metric ton, its highest closing price since April 7.

“Today’s crude palm oil futures are holding firm on the back of strong Dalian vegetable oils, while Southern Peninsular Palm Oil Millers Association data show sign of production slowdown which provides support,” a Kuala Lumpur-based trader said.

Malaysia’s palm oil stocks rose to a five-month high in July to 2.63 million metric tons, a 3.32% increase on a monthly basis as production volumes rose higher than export demand, data from the Malaysian Palm Oil Board showed on Monday, which were within expectations, according to the trader.

Exports of Malaysian palm oil products for August 1-10 rose 14.8%, according to independent inspection company AmSpec Agri Malaysia, while Intertek Testing Services said they were up 2.6%.

Dalian’s most-active soyoil contract rose 0.13%, while its palm oil contract gained 0.59%. Soyoil prices on the Chicago Board of Trade were up 1.16%.

Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.

Oil prices were little changed on Monday as optimism over talks to reopen the Strait of Hormuz was tempered by Iran’s insistence that the United States must satisfy several demands before the waterway could reopen.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.