Palm oil gains on rival Dalian oil, weakening ringgit

The price of Malaysian palm oils futures rose for the second consecutive session on Wednesday, boosted by gains in Dalian oils, a stronger ringgit and an increase in demand from key export markets.

The benchmark contract for palm oil delivery in October on the Bursa Derivatives exchange gained 23 ringgit or 0.54% to 4,277 Ringgit ($1,009.92).

Anilkumar bagani, Sunvin Group's research head, says that the crude palm oil futures have traded higher due to bullish signals including the overnight surge of Chicago soyoil futures and energy futures, and strong Chinese vegetable oils futures during Asian hour.

He added that the weakening of the ringgit had also increased export competitiveness in ringgit-denominated CPOs.

Bagani, however, said that China's increased exports to India of soybean oil at competitive prices pose a risk of substitution, which could impact the demand for palm oil in the region.

Indian importers purchased a record amount of 150,000 metric tonnes of soyoil in China. A glut in supply prompted Chinese crushers offer a discount for India's South American suppliers.

Dalian's palm oil contract gained 0.63%, while the most active soyoil contract grew by 0.81%. Chicago Board of Trade soyoil prices were down by 0.62%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

The palm ringgit's currency, the U.S. Dollar, fell by 0.09%, making the commodity a little cheaper for buyers who hold foreign currencies.

Oil prices fell slightly as investors awaited the outcome of President Donald Trump's new deadline for Russia to stop its war in Ukraine, and his threats to impose tariffs on countries that trade oil with Russia.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

(source: Reuters)