Palm oil hits annual high amid rising crude oil prices

The benchmark June palm oil contract on the Bursa Malaysia Derivatives Exchange (BMD) continued to rise for the fourth consecutive session, closing Monday up 1.8%, up 82 ringgit to 4,654 ringgit (US$1,184.83) per tonne at the close, reaching its highest level in more than a year, Business Recorder reports.

Crude palm oil futures were supported by a significant rise in Dalian palm olein oil prices, which traded at their highest since June 2022 during the morning Asian session. The market is supported by rising oil prices.

The most actively traded Dalian soybean oil contract rose 0.09%, while the palm oil contract rose 2.39%. Meanwhile, soybean oil prices on the Chicago Mercantile Exchange fell 1.69%.

Oil prices are following oil prices as commodities compete for share in the global fuel production market. Higher oil futures prices are making palm oil a more attractive feedstock option for biodiesel production, while alternative oils are rising in price along with the primary oils.

Oil prices have risen amid the ongoing US-Israeli war against Iran, which is disrupting oil production and transportation in the Middle East, despite US President Donald Trump’s call for a global effort to secure the vital Strait of Hormuz.

Experts estimate that Malaysian palm oil exports increased by 43.5% to 56.9% from March 1 to 15 compared to the previous month. Official data from the Palm Oil Council is expected later this month.

The ringgit, the palm oil currency, strengthened 0.2% against the dollar, making the commodity more expensive for buyers holding foreign currency.

The average offered price of sunflower oil (FOB Black Sea ports) for March delivery, according to OleoScope, was $1,355 per tonne. This is the highest price in the last three years.

Tags: palm oil, prices