Palm prices rise on Malaysian biodiesel and stronger soyoil.

Malaysian palm oil futures closed Monday more than 1% above their previous close,?boosted by optimism about Malaysia's plans to increase its biodiesel requirement?and higher Chicago soyoil price.

The benchmark palm oil contract on Bursa Derivatives Exchange for July delivery rose 50 ringgit or 1.09% to $4,620 ringgit (1,169.62 USD) per metric ton.

Anilkumar bagani, head of commodity research at Sunvin Group in Mumbai, said that palm traded higher as a result of the biodiesel news from Malaysia.

Malaysia's deputy premier?said that in order to reduce diesel prices, it will produce biodiesel in June with a mixture of?15% of palm oil. The increase will take place in stages, with the goal of moving to a?20% mix and possibly approaching a 50 percent blend in the next two or three years.

The Chicago Board of Trade Soyoil prices were up by 0.36%. Dalian Commodity Exchange will be closed on May 6 for the holiday.

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

Oil prices increased 1% in the absence of a U.S. peace deal with Iran, while the U.S. announced it would assist ships stranded 'in the Strait of Hormuz to get safe passage.

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

The palm ringgit's trade currency strengthened by 0.43% against US dollars, increasing the price of the commodity for buyers who hold foreign currencies.

Indonesia exported 5.85 millions tons of palm oil in the first quarter, an increase of 9.30% compared to a year ago, according to data from the statistics bureau.

Five dealers reported that India's palm?imports dropped 27% in April to a one-year low, due to the?sluggish demand from institutional buyers, and a recent price rise which eroded the discount it offered to rival oils. ($1 = 3.9500 ringgit)

(source: Reuters)