Palm oil closes up after crude prices climb higher

JAKARTA: Malaysian palm oil futures gained on Monday, supported by higher crude oil prices, with rival soy oil prices in the Chicago market also providing support.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 39 ringgit, or 0.81%, at 4,853 ringgit ($1,191.21) a metric ton at closing.

“Today’s FCPO is holding firm on the back of strong crude oil with anticipation of better demand for bio-diesel usage in the future,” a Kuala Lumpur-based trader said.

Crude prices continued their surge, rising more than 3% on Monday, after new strikes on Saudi Arabian energy infrastructure and attacks on ships in the Middle East compounded supply concerns.

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

Dalian’s most-active soyoil contract dropped 1.08%, while its palm oil contract shed 1.24%. Soyoil prices on the Chicago Board of Trade were up 0.14%.

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

The ringgit, palm’s currency of trade, weakened 0.15% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Cargo surveyors estimated that exports of Malaysian palm oil products for September 1 to 10 fell between 11.7% and 17.5% from a month earlier.