Palm oil prices jump the most in three years as biodiesel prospects improve.

Malaysian palm oil futures jumped more than 9% on Monday. This was the largest jump in three years. It is expected that a rise in crude 'oil' will boost demand for biodiesel. The benchmark May palm oil contract on the Bursa Derivatives exchange gained 296 Ringgit or 6.78% to $4,663 Ringgit ($1,175.74) per metric ton at midday after surging to 4,803 Ringgit earlier in day. This was its highest level for more than a year.

Anilkumar bagani, the research head of Mumbai-based Sunvin Group's vegetable oil brokerage, said that "the futures rose to their limit today following an outrageous rally" in energy prices. The oil prices rose by more than 25% Monday to their highest level since mid-2022, as major producers cut back on supplies and the fear of long-term shipping disruptions arose due to the U.S. vs. Israel war.

Palm oil is more attractive as a biodiesel feedstock because crude oil futures are stronger. Dalian's Soy oil contract, which is the most active contract in Dalian, rose 5.83% while palm oil contracts rose 7%. Chicago Board of Trade Soy?oil gained 4.54%.

Palm oil tracks the price movement of competing edible oils in its competition for a piece of the global vegetable oils market.

The Malaysian ringgit (the contract's currency of trade) eased by 0.61% in relation to the U.S. Dollar, making palm oil more affordable for holders of foreign currencies.

Technical analyst Wang Tao has said that palm oil could break through a'resistance' at 4,444 Ringgit per metric ton, and move into the range of 4,517-4 615 Ringgit.

(source: Reuters)