Malaysian palm oil futures traded higher on Thursday after six sessions of losses, tracking global equity and commodities markets and as the recent selloff brought down palm prices to an attractive level for buyers. The benchmark palm oil contract for November on the Bursa Malaysia Derivatives exchange gained 3.2 percent to 1,927 ringgit ($444.39) a tonne, its biggest one-day gain since June 1. Traded volume stood at 64,922 lots of 25 tonnes each, well above the roughly 35,000 lots usually traded per day.
"What's positive is that margins are good for local refiners," said a trader in Kuala Lumpur, adding that the recent market turmoil has widened the price gap between rival bean oil and palm oil products, making them attractive for the consumer. The palm benchmark hit its lowest level since March 2009 on Tuesday and lost 9.4 percent in the six sessions to Wednesday.
Nitesh Shahra, president of the refinery division of Ruchi Soya, India's biggest edible oil refiner, says palm prices could drop to 1,800 ringgit if inventories rise further due to poor demand from biodiesel industry. India is a top importer of the commodity. In comparative vegetable oils, the US September soyoil contract was 2 percent higher in late Asian trade, while the most active soybean oil contract on the Dalian Commodity Exchange was up 0.5 percent.