JAKARTA: Malaysian palm oil futures closed higher on Wednesday, extending gains for a third consecutive session, supported by the strength in Chicago and Dalian rival oils.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange rose 75 ringgit, or 1.92%, to 3,979 ringgit ($852.03) a metric ton on the closing.

“Overnight strong rival oils lifted the benchmark. Morning profit-taking activities brought price (down) to briefly test a low of 3,935 ringgit, before regaining upside momentum to midday high of 3,971 ringgit,” a Kuala Lumpur-based analyst said.

Soyoil prices on the Chicago Board of Trade climbed 0.45%. Dalian’s most active soyoil contract was up 2.17%, while its palm oil contract increased 3.08%.

Palm oil futures closes 2.71% higher on soyoil strength

Soybean prices impact the cost of soyoil, which competes with palm oil for a share in the global vegetable oil market.

Palm oil on the European vegetable oils market rose sharply on Tuesday, following rallying Malaysian palm oil futures. Prices for palm oil rose between $5 and $47.50 a ton.

Malaysia is confident exports of its palm oil and related products to China will increase further this year. The country shipped $3.72 billion worth of the commodity and related products last year to China.

According to independent inspection company AmSpec Agri, exports of Malaysian palm oil products between Nov. 1-15 rose 6.4% to 645,590 tonnes from 606,980 tonnes shipped during Oct. 1-15.

Meanwhile, Cargo surveyor Societe Generale de Surveillance (SGS) estimates exports of Malaysian palm oil products for November 1-15 at 602,510 metric tons.

India’s imports of palm oil and sunflower oil in 2022/23 surged 24% and 54%, respectively, to record highs, helped by a rebound in consumption and steep discounts in both oils’ prices compared to rival soyoil.

The Malaysian ringgit, palm’s currency of trade, is strengthening at 1.1% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.