KUALA LUMPUR: Malaysian palm oil futures edged up for a second consecutive session on Tuesday, tracking strength in crude oil prices and a weaker ringgit.
A weaker ringgit, palm's currency of trade, usually supports the edible oil by making it cheaper for holders of foreign currencies. It weakened 0.2 percent against the dollar on Tuesday evening to 4.1350.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 0.8 percent to 2,181 ringgit ($527.45) a tonne at the close of trade. It earlier rose as much as 1.2 percent to 2,189 ringgit, its strongest level since Sept. 19.
Palm had also jumped as much as 1 percent in its previous trading session, after five consecutive days of losses.
Trading volumes stood at 35,717 lots of 25 tonnes each at the close of trade.
"The market is tracking strong crude oil prices," said a Singapore-based futures trader.
Palm oil prices are affected by movements in crude oil, as palm is used as feedstock to make biodiesel.
Oil prices traded near four-year highs on Tuesday, as looming US sanctions against Iran and unwillingness by the Organization of the Petroleum Exporting Countries (OPEC) to raise output supported the market.
Another Kuala Lumpur-based trader added that the market could also be supported by a firmer dollar ahead of an expected rate hike by the Federal Reserve. This would weaken the Malaysian ringgit and lend support to palm.
The dollar carved out small gains against the euro and yen on Tuesday as investors looked to policy clues from the US Federal Reserve, which is widely expected to hike rates this week, and as the Sino-US trade dispute kept markets cautious.
In other related oils, the Chicago September soybean oil contract was up 0.2 percent, while the January soybean oil contract on the Dalian Commodity Exchange rose 1.1 percent.
Meanwhile, the Dalian January palm oil contract was up 0.4 percent.
Palm oil prices are affected by movements of other edible oils, as they compete for a share in the global vegetable oils market.
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