Malaysian palm oil futures rose on Monday, posting a fifth straight session of gains, as they tracked a rally in rival oils on the Dalian Commodity Exchange. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 0.3% at 2,269 ringgit ($541.53) per tonne at the close, its highest since six months ago.
"Dalian has been on a continuous uptrend since last week due to the escalating trade war," said a Kuala Lumpur-based trader. China on Friday announced retaliatory tariffs on about $75 billion worth of US goods, including agricultural products. The September soyaoil contract on the Dalian exchange climbed 1.7%, while the Dalian September palm oil contract rose 3%.
Another trader said one scenario the market was keenly watching was the possibility of palm oil decoupling from soyaoil as a result of the trade war. Palm oil prices are impacted by movements in related vegetable oils as they compete for a share in the global edible oils market. Slower output data continued to lend support to sentiment in the palm market.
Data released by the Malaysian Palm Oil Association on Monday showed slower production growth for the first 20 days of August versus a month ago, according to traders. US soyaoil futures on the Chicago Board of Trade were last up 0.5% on Friday.