Palm oil jumps by 2% as rival crudes and oils are stronger
The price of Malaysian palm oil futures increased by?2% Tuesday, as the support from rivals?edible oil and crude oil rose outweighed the pressure from cargo surveyors data that showed?sluggish exports in August.
By midday, the benchmark palm oil contract for November delivery on?the Bursa Derivatives exchange had risen 98 ringgit or 2% to 4,992 Ringgit ($1,237.79), extending gains for a third straight session.
Anilkumar bagani, head of commodity research at Sunvin Group, stated that crude palm oil futures were higher after a rally on Chicago soyoil, Chinese palm olein, and soyoil during Asian hours, along with stronger energy prices.
The palm oil discount was also wider than gas oil, which benefited the market. He said that the market is ignoring the lower Malaysian palm exports for August, and the lack of a significant drop in production.
Intertek Testing Services, a cargo surveyor, estimated that the exports of Malaysian palm oil products fell 14.9% in August from a year earlier. AmSpec Agri Malaysia will release its estimates in the afternoon.
Dalian's palm oil contract grew by 1.07%, while the most active soyoil contract increased by 1.01%. Chicago Board of Trade soyoil prices rose 2.33%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price movement of its rival edible oils.
The price of oil rose by around $1 after the U.S. and Iran resumed fighting in the Middle East, rekindling fears about disruptions to supply from the world's?most important?crude producing region.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
A trade ministry regulation showed that Indonesia set its crude palm oil reference price for September at $1,007.51 a ton.
The weather department said that India's monsoon rains will be below average in September, after the August rainfall was 16% lower than normal. This raises concerns about crop yields, and economic growth in Asia's third largest economy.
Technical analyst Wang Tao stated that palm oil could rise to a range between 4,949-4990 ringgits per ton after stabilising around 4,814 rings.
(source: Reuters)
