Palm oil prices rise to a two-week high

Malaysian palm oil futures extended gains for a second consecutive session on September 7, reaching their highest level in two weeks. The November contract on Bursa Malaysia rose by 1.01%, or 50 ringgit, to 4,979 ringgit ($1,231) per ton, its highest closing level since August 21.

The Malaysian market was mainly supported by stronger vegetable oil prices on the Dalian exchange. China’s most-active palm oil contract gained 1.39%, while soyoil rose by 0.31%. The Chicago Board of Trade was closed for a US public holiday.

Higher crude oil prices provided additional support, with the market trading near six-week highs amid reduced crude flows from the Middle East. Stronger crude oil prices make palm oil more competitive as a biodiesel feedstock and could support demand.

Meanwhile, the Malaysian ringgit weakened by 0.07% against the US dollar, making palm oil slightly cheaper for buyers holding foreign currencies. Palm oil also typically tracks movements in other vegetable oils as they compete for a share of the global market.

Strong import demand from India is also drawing market attention. Aggressive vegetable oil purchases have caused congestion at major Indian ports, with vessel unloading delayed by as much as 10 days as shore tanks fill and refiners struggle to handle incoming cargoes.

Tags: prices, Malaysia, palm oil, futures