Palm oil prices rise as rival oil prices do.

Malaysian palm futures closed higher Monday as they tracked stronger edible oils and higher crude oil prices. They were also helped by the weaker ringgit.

The benchmark palm-oil contract for September delivery at Bursa Malaysia's Derivatives exchange gained 58 Ringgit or 1.39% to $4,232 Ringgit ($995.76) per metric ton.

"Prices are being supported by the firm crude oil that continues to bolster global edible oil markets," Darren Lim said, commodities strategist for Singapore-based brokerage Phillip Nova.

The slight weakening of the ringgit has also maintained buying interest, making Malaysian Palm Oil more competitive abroad.

Dalian's palm oil contract, which is the most active contract, gained 0.71%. Chicago Board of Trade soyoil prices rose by 0.8%.

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

The price of oil rose Monday to its highest level since the beginning of 2009.

The highest level of three weeks

Investors were encouraged by the prospect of further U.S. sanction against Russia, which could affect global oil supplies. China's increased oil imports also helped.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's trade currency, the dollar, has weakened by 0.02%, making the commodity more affordable for buyers who hold foreign currencies.

An industry group said that India's imports of palm oil reached an 11-month peak in June, as refiners increased purchases because they were offered a discount on soyoil or sunflower oil and also to replenish their depleted stocks.

Data from the industry regulator showed that Malaysian palm oil stocks increased by 2.41%, reaching a 18-month high at 2.03 million tonnes at the end June.

According to data provided by cargo surveyor Intertek Testing Services, and inspection company AmSpec Agri Malaysia, exports of Malaysian products containing palm oil during the period July 1-10 rose between 5.3% to 12% compared to a month ago.

(source: Reuters)