Palm rises by more than 2% as Chicago soyoil and crude oil are stronger

Malaysian palm futures closed more than 2% higher Thursday as trading resumed after a two-day Lunar New Year break, due to stronger Chicago soyoil prices and crude oil.

The benchmark 'palm oil' contract for May delivery at the Bursa Derivatives Exchange rose 101 ringgit or 2.51% to 4,117 Ringgit ($1,053.75) per metric ton.

Anilkumar bagani, the commodity research head of Mumbai-based Sunvin Group, stated that the Crude Palm Oil Futures rose in a bullish tone following a rally on Chicago soyoil and energy futures. The contract was catching up with the vegetable oil price movement in similar markets during the Malaysian holiday, Bagani said.

Bagani stated that the lack of Chinese markets, and weak export demand is limiting palm oil recovery.

Dalian Commodity Exchange will be closed during the Lunar New Year holiday and resume trading on 24 February.

Bagani said that the market anticipates palm oil to be harvested early in February, ahead of Ramadan.

It could limit a major drop in Malaysian palm oils end-February stock unless export performances start improving.

On Friday, cargo surveyors will?release estimates of exports of Malaysian Palm Oil Products for February 1-20.

Prices of soyoil on the Chicago Board of Trade?increased 0.05%. Palm oil follows the price movement of rival edible oils as it competes to gain a share of global vegetable oils.

Oil prices increased due to 'increasing concern over a potential military conflict between Iran and the United States as both countries intensified military activity in this oil-producing area.

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

The palm ringgit's currency of trade has weakened by 0.18% against dollars, making it more affordable to buyers who hold foreign currencies.

(source: Reuters)