Palm oil prices rise on Dalian Oils and a weaker ringgit
The price of Malaysian palm oils futures increased on Wednesday. This was due to gains in Dalian oils, a rival oil, and the weaker ringgit. These factors helped boost demand for this commodity in major export markets.
At the midday break, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery gained 12 ringgit or 0.28% to 4,266 Ringgit ($1,007.80), a metric tonne. The contract increased by 0.28% during the previous session.
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, in rare purchases. A glut of supply prompted Chinese crushers offer a discount for India's South America-based suppliers.
Dalian's palm oil contract gained 0.6%, while the most active soyoil contract grew by 0.88%. Chicago Board of Trade Soyoil Prices were down by 0.26%.
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 trade currency, the dollar, has weakened by 0.05%, making it slightly cheaper for foreign buyers.
The oil prices rose in early trading, after rising by more than 3% the previous session. This was due to the potential shortages that could arise after U.S. president Donald Trump gave Moscow a short deadline for ending the war in Ukraine.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
(source: Reuters)
