Malaysian palm oil futures rose more than 1% on Thursday

Malaysian palm oil futures rose more than 1% on Thursday, rebounding from two sessions of declines, helped by rising Chicago soybean oil prices, oil prices, and strong export data.

The benchmark June delivery palm oil contract FCPO1 on Bursa Malaysia rose 74 ringgit, or 1.65%, to 4,570 ringgit (US$1,145.08) per metric ton by midday.

Crude palm oil futures are expected to rise sharply, following rising Chicago soybean oil prices and a recovery in energy prices, said Anilkumar Bagani, head of commodity research at Sunvin Group, a Mumbai-based brokerage.

Strong palm oil exports also provided support, with shipping experts estimating that exports from March 1 to 25 rose by 38.4% to 50.6% compared to the previous month.

According to Bagani, the prospect of higher export duties on Indonesian palm oil in April also contributed to the growth.

Furthermore, he noted, the discount on palm oil compared to gasoil has widened again, increasing its attractiveness as a biofuel feedstock.

The most actively traded Dalian soybean oil contract rose 0.77%, while the palm oil contract rose 0.63%. Soybean oil prices on the Chicago Mercantile Exchange rose 0.36%.

Palm oil prices follow those of competing edible oils as it competes for share in the global vegetable oil market.

Oil prices rose more than $1 per barrel, recouping losses from the previous session, amid concerns that protracted fighting in the Middle East will further disrupt energy flows.

Higher oil futures prices make palm oil a more attractive feedstock for biodiesel production.

The ringgit weakened 0.73% against the dollar, making the commodity cheaper for buyers holding foreign currency.

Tags: prices, palm oil