Palm oil gains over 1% as rival crudes and oils are stronger

The price of Malaysian palm oil futures increased by more than 1% on Tuesday as the gains in rival edible oil and crude oil prices were offset by weak data from cargo surveyors on August exports.

The benchmark palm oil contract for November delivery at Bursa Derivatives Exchange grew 77 ringgit or 1.57% to 4,971 Ringgit ($1,231.67) per metric ton, continuing gains for the second consecutive session.

Anilkumar bagani, head of commodity research at Sunvin Group, said that the price of crude palm oil futures rose following a rally on Chicago soyoil, Chinese palm olein, and soyoil during Asian hours.

The market also benefitted from the palm oil discount that was increasing against gas oil. We also observe that the market ignores the lower?Malaysian exports of palm oil in August, and the lack of any significant 'decrease in production", he said.

Exports of palm oil-based products from Malaysia fell between 6.5% to 14.9% in August compared with a month ago, according to cargo surveyors.

Dalian's palm oil contract, which is the most active contract, rose by 0.55%. Chicago Board of Trade soyoil prices rose 2.02%.

Palm oil monitors?the movements in price of rival edible oils as it competes to gain a share on the global vegetable oils markets.

The oil prices rose as fears about supply disruptions in the key region for crude production, the Middle East, were renewed by the return of fighting between Iran and the U.S.

Palm oil is a more attractive feedstock for biodiesel due to the stronger crude oil futures.

A trade ministry regulation revealed that Indonesia set the?September crude oil reference price of $1,007.51 a ton.

The weather department reported on Monday that India will likely receive below-average rainfall during the monsoon season in September, after August precipitation was?16% lower than normal. This raises concerns for crop yields and economic development in Asia's largest economy.

(source: Reuters)