Malaysian palm oil prices hit four-month high on Monday

Malaysian palm oil futures climbed to their highest level in more than four months on Monday, August 10, tracking gains in rival vegetable oils. The benchmark October contract on Bursa Malaysia rose by 47 ringgit, or 1%, to 4,724 ringgit ($1,155.58) per ton, its highest closing level since April 7.

The market was supported by stronger soyoil and palm oil prices on China’s Dalian exchange, as well as gains in Chicago soyoil. Dalian’s most-active soyoil contract rose 0.13%, while palm oil gained 0.59%. CBOT soyoil futures increased by 1.16%.

Signs of slowing palm oil production in Malaysia provided additional support. Meanwhile, the country’s palm oil stocks increased by 3.32% month-on-month in July to 2.63 mln tons, reaching a five-month high, as production growth outpaced export demand.

Export performance improved in early August. AmSpec Agri Malaysia estimated that Malaysian palm oil exports increased by 14.8% during August 1–10. Intertek Testing Services reported a more moderate increase of 2.6% over the same period.

The palm oil market is also being influenced by crude oil prices, which remained relatively stable amid talks over reopening the Strait of Hormuz to shipping. Higher crude oil prices typically support palm oil by making it more competitive as a feedstock for biodiesel production.

Tags: prices, Malaysia, palm oil