JAKARTA: Malaysian palm oil futures traded higher on Friday, tracking soaring crude oil prices and rival edible oils in Dalian and Chicago amid geopolitical concerns, but the market was headed to snap a four-week streak of gains.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 76 ringgit, or 1.98%, to 3,915 ringgit ($921.50) a metric ton by the midday break.
The contract has lost slightly 0.05% so far this week.
“Today’s market is reacting towards Israel’s bombing of Iran, resulting in the rise of crude oil,” a Kuala Lumpur-based trader said.
Oil prices surged more than 9% on Friday, hitting an almost five-month high after Israel struck Iran, dramatically escalating tensions in the Middle East and raising worries about disrupted oil supplies.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract rose 1.4%, while its palm oil contract gained 2.12%.
Soyoil on the Chicago Board of Trade (CBOT) added 1.43%. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Palm oil higher on bargain buying
India’s palm oil imports in May rose about 84% month-on-month to 592,888 metric tons, a trade body said on Thursday.
Malaysian ringgit, the palm’s currency of trade, strengthened 0.75% against the US dollar, making the contract more expensive for holders of foreign currencies.
Palm oil may break resistance at 3,927 ringgit per ton and rise toward the 3,962-3,998 ringgit range.
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