JAKARTA: Malaysian palm oil futures closed higher on Wednesday, supported by stronger rival soyoil in the Chicago market and rebounding crude oil prices.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 71 ringgit, or 1.6%, to 4,499 ringgit ($1,149.76) a metric ton at the close. It had fallen to 4,395 ringgit earlier in the day.
Soyoil on the Chicago Board of Trade rose 3.11%. Dalian’s most-active soyoil contract was up 0.68% after losing 0.19% during the morning trade, while its palm oil contract added 0.51% after dropping 0.25% earlier.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Crude oil prices rebounded on Wednesday as markets doubted whether the International Energy Agency’s reported plan for a record release of oil reserves could offset potential supply shocks from the U.S.-Israeli conflict with Iran.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Exports of Malaysian palm oil products for March 1-10 rose 45.3% compared to February 1-10, independent inspection company AmSpec Agri Malaysia said. According to cargo surveyor Intertek Testing Services, it rose 37.9%.
Meanwhile, rising vegetable oil prices and freight rates are pushing Indian buyers toward prompt shipments amid concerns that deliveries of newly purchased soyoil and sunflower oil could be delayed by the Middle East conflict.
Palm oil export orders for new shipments have moderated after the U.S.-Israeli war against Iran drove up logistics and insurance costs, Indonesia’s leading producers’ body GAPKI said on Wednesday.
The Malaysian ringgit, the contract’s currency of trade, strengthened 0.18% against the U.S. dollar, making palm oil more expensive for foreign currency holders.
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