Palm oil futures are up on the back of gains in rival oils and ringgit weakness

Malaysian palm futures soared on Wednesday. This was largely due to a combination of a weaker ringgit and a surge in edible oils from rival markets in Dalian and Chicago.

By the close, the benchmark palm oil contract on the Bursa Derivatives exchange for March delivery was up 45 Ringgit or 1.13% at 4,035 Ringgit ($994.82) per metric ton.

A Kuala Lumpur based trader reported that "Bursa CPO opened slightly higher,?tracking the spread movements against competing oilseeds".

Dalian's palm oil contract rose by 0.66%, but its most active soyoil contract grew by 0.73%. The Chicago Board of Trade Soyoil price rose by 0.67%.

Palm oil tracks the price changes of competing edible oils as it competes to gain a share in the global vegetable oils markets. The Malaysian Ringgit, which is the contract currency for trade, has weakened by 0.3% against US dollars, making palm oil more affordable to holders of foreign currencies. Indonesian President Prabowo Subianto said on Wednesday that his government could seize up to an additional 4 to 5 million hectares of palm oil plantations (12 million acres), on top of the 4.1 million hectares it seized last season.

Analysts say that the seizure of biodiesel could increase global prices even further by disrupting production.

(source: Reuters)