Palm extends gains, hits two-week high on stronger Dalian palm olein

KUALA LUMPUR: Malaysian palm oil futures climbed to a two-week high on Monday, extending gains for a second consecutive session, supported by stronger Dalian palm olein prices.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 50 ringgit, or 1.01%, at 4,979 ringgit ($1,231.21) a metric ton, the highest closing price since August 21.

“Strength in Dalian palm olein provided support to crude palm oil prices, keeping the market in positive territory towards the midday close,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract rose 0.31%, while its palm oil contract added 1.39%. The Chicago Board of Trade is closed for a public holiday.

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

Oil prices were near six-week highs as tit-for-tat strikes between the U.S. and Iran on vessels sailing in the Strait of Hormuz and other areas kept crude oil flows in the Middle East low.

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

The ringgit, palm’s currency of trade, weakened 0.07% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Meanwhile, India’s aggressive vegetable-oil buying has led to congestion at major ports, delaying vessel unloading by as much as 10 days as shore tanks fill and refiners struggle to clear incoming cargo, industry officials told Reuters.