Palm oil rises as rival crude and rival oil prices are stronger
Malaysian palm oil futures closed higher on Monday as they tracked stronger edible oil prices in Dalian and Chicago. Crude oil prices also increased, supporting prices.
The benchmark palm-oil contract for delivery in November on the Bursa Derivatives exchange closed at 4,488 Ringgit ($1,064.77) per metric ton after gaining 40 ringgit or 0.9%.
Dalian's palm oil contract, which is the most active contract, rose by 0.11%. The Chicago Board of Trade's (CBOT), which trades soyoil, saw a 0.96% increase.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The oil price rose by more than $1 Monday, regaining some losses from last week, as OPEC+ increased its output, but it was perceived to be modest. This was due to fears about possible sanctions against Russian crude.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Customs data released on Monday showed that China's imports of soybeans increased to 12,28 million metric tonnes, or 1.15 percent year-on-year. This was the highest ever for the month August.
A survey shows that Malaysian palm oil inventories will rise for the sixth consecutive month in august, as production continues outpacing exports, despite an improvement in demand.
The dollar has gained 0.12% in value against the ringgit. This makes the palm a little more expensive for foreign currency buyers. ($1 = 4.2215 ringgit) Reporting by Dewi Kuritawati, Editing by Sumana Nandy & Harikrishnan Nair
(source: Reuters)
