KUALA LUMPUR: Malaysian palm oil futures ended 1% higher on Wednesday despite a slump in November exports, boosted by higher crude and tracking a rally in competing edible oils due to concerns over global supplies.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed up 1.11% at 3,285 ringgit ($804.16) a tonne.

“The recent steep downward revisions of crop estimates in other competing edibles oils, namely soybean and sunflower oil had triggered heavy buying,” IJM Plantations CEO Joseph Tek Choon Yee said in a statement.

The spill-over strength from soybean and sunflower oil prices has helped raise the crude palm oil price threshold to above 3,000 ringgit per tonne, even as consumers shift part of their demand to cheaper vegetable oils, he added.

Tek said lower-than-expected production across all edible oils combined with sustained demand would keep edible oils inventories, including palm oil, “extremely tight”.

Dalian’s most-active soyaoil contract rose 1.2%, while its palm oil contract gained 1%. Soyaoil prices on the Chicago Board of Trade were up 0.8%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Oil rose for a fourth straight day on Wednesday, driven by hopes of a Covid-19 vaccine helping boost fuel demand, making palm a more attractive option for biodiesel feedstock.

However, gains were capped by a 19% monthly decline in exports from Malaysia during Nov. 1 to 25 as shipments to India halved, according to data from cargo surveyors.—Reuters