Palm climbs over 1% on stronger rival oils, crude

KUALA LUMPUR: Malaysian palm oil futures rose more than 1% on Tuesday, as gains in firmer as rival edible oils and crude oil prices offset weak cargo surveyor data on August exports.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange rose 77 ringgit, or 1.57%, to 4,971 ringgit ($1,231.67) a metric ton at the close, extending gains for a second straight session.

Crude palm oil futures traded higher following a rally in Chicago soyoil and Chinese palm olein and soyoil futures during Asian hours, coupled with stronger energy prices, said Anilkumar Bagani, commodity research head at brokerage Sunvin Group.

“The market also benefited from the widening palm oil discount against gas oil. Currently, we also see that the market has ignored the weaker Malaysian palm oil exports in August and the absence of any significant decline in production,” he said.

Cargo surveyors estimated that exports of Malaysian palm oil products in August fell between 6.5% and 14.9% from a month earlier.

Dalian’s most-active soyoil contract rose 0.94%, while its palm oil contract added 0.55%. Soyoil prices on the Chicago Board of Trade were up 2.02%.

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

Oil prices gained as the resumption of fighting between the U.S. and Iran in the Middle East renewed fears of supply disruptions from the world’s key crude-producing region.

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

Indonesia has set its September crude palm oil reference price at $1,007.51 per ton, a trade ministry regulation showed.

India is likely to receive below-average monsoon rainfall in September after August precipitation came in 16% below normal, the weather department said on Monday, raising concerns about crop yields and economic growth in Asia’s third-largest economy.