Palm oil gains against Dalian and Chicago rivals, with stronger crude

Malaysian palm futures were up on Thursday due to higher crude oil prices, gains in other edible oils and the expectation of increased biodiesel consumption following Indonesia's decision to speed up road tests for B50 blend.

The benchmark 'palm oil' contract for May delivery at the Bursa Derivatives exchange gained 42 ringgit or 0.93% to 4,541 Ringgit ($1,157.24), after reaching an intraday peak of 4,628 Ringgit.

A Kuala Lumpur based trader stated that "the futures are currently governed by the crude oil situation. Any massive upside in Dalian, Chicago, or crude will cause it to?react".

The news that Indonesia is pushing ahead with the B50 implementations also provides support to market, the trader added.

Dalian's soyoil contract that is most active gained 1.46% while palm oil contract rose 2.43%. Soyoil traded on the Chicago Board of Trade increased by 0.79%.

Palm 'oil monitors the price movements of rival edible oil as it competes to gain a share in the global vegetable oil market.

Oil prices rose sharply Thursday after Iran intensified its attacks on oil and transportation facilities in the Middle East. This fueled fears of a long-term conflict and possible disruptions of?oil flow through the Strait of Hormuz.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Indonesia's deputy energy minister announced on Wednesday that it is speeding up its B50 biodiesel road tests, which are made from 50% palm oil and 50% conventional oil. This will be done in the event of a shortage of crude oil due to Middle East conflict.

A circular posted on the Malaysian Palm Board's website Thursday showed that Malaysia had raised its April crude palm oil price reference, which increased the export duty from 5% to 9.5%.

A trade group said that India's imports of palm oil in February increased by about 11% compared to the previous month, reaching 847,689 tons. $1 = 3.9240 Ringgit (Reporting and editing by Eileen Soreng, Diti Pujara).

(source: Reuters)