Palm oil gains tracking rival oils, higher crude prices

Malaysian palm oil futures closed higher on Monday, tracking stronger rival edible oils and higher crude prices, and also supported by a weaker ringgit.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 58 ringgit, or 1.39%, to 4,232 ringgit ($995.76) a metric ton at the close.

“Prices are supported by firm crude oil, which continues to bolster edible oil markets globally,” Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova, said.

“The slight weakness in the ringgit has also sustained buying interest, making Malaysian palm oil more competitive internationally.”

Dalian’s most-active soyoil contract increased 0.3%, while its palm oil contract gained 0.71%. Soyoil prices on the Chicago Board of Trade rose 0.8%.

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

Oil prices rose on Monday and reached their highest level in three weeks, as investors eyed further U.S. sanctions on Russia that may affect global supplies, while higher oil imports by China also offered support.

Palm rises for two consecutive weeks on stronger rival oils

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

The ringgit, palm’s currency of trade, slightly weakened 0.02% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

India’s palm oil imports jumped to an 11-month high in June as refiners ramped up purchases due to a price discount compared to rival soyoil and sunflower oil, and to replenish depleted inventories, an industry body said on Monday.

Malaysia’s palm oil stocks rose 2.41% to an 18-month high of 2.03 million tons at the end of June, industry regulator data showed.

Exports of Malaysian palm oil products during July 1-10 were estimated to have risen between 5.3% and 12% from a month earlier, according to data from cargo surveyor Intertek Testing Services and inspection company AmSpec Agri Malaysia.