Palm opens higher on strong rival oils, crude oil

Malaysian palm oil futures opened higher on Thursday, extending gains for a second consecutive session, supported by stronger rival edible oils and crude oil prices.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained RM14, or 0.31 per cent, to RM4,526 (US$1,071.50) a metric ton in early trade.

Dalian’s most-active soyoil contract rose 0.24 per cent, while its palm oil contract added 0.28 per cent. Soyoil prices on the Chicago Board of Trade were up 0.53 per cent.

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

Oil prices rose by around 1 per cent in early trade after US President Donald Trump said Indian Prime Minister Narendra Modi had pledged his country would stop buying oil from Russia, which supplies about one-third of its imports.

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

The ringgit, palm’s currency of trade, strengthened 0.14 per cent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.

India’s palm oil imports in September dropped to their lowest point since May as refiners shifted to cheaper soyoil, shipments of which hit a more than three-year high, the Solvent Extractors’ Association of India said.

Cargo surveyors estimated that exports of Malaysian palm oil products during October 1-15 rose between 12.3 per cent and 16.2 per cent from a month-ago levels.

Tags: benchmark contract, soyoil, Malaysia, palm oil, futures