Palm oil climbs as Chicago soyoil and crude oil prices firm up
The market for Malaysian palm oils futures rose on Wednesday, marking the fourth session in a row. This was due to gains in Chicago soyoil prices and energy.
The benchmark contract for palm oil delivery in June on the Bursa Derivatives exchange gained 99 ringgit or 2.24% to 4,518 Ringgit ($1,015.05) per metric ton.
Anilkumar bagani, head of commodity research at Mumbai-based Sunvin Group, said that the price of crude palm oil was higher following the Malaysian holidays, due to a rally on Chicago soyoil and energy prices.
Bagani stated that U.S. soybean oil prices increased after news of oil and biofuels groups meeting with the U.S. Environmental Protection Agency in order to advocate for higher mandates on biomass diesel blending. The U.S. Department of Agriculture secretary Brooke Rollins also announced funding of $537 millions for biofuel infrastructure.
Dalian's palm oil contract gained 2.04%, while the most active soyoil contract increased by 0.66%. Chicago Board of Trade soyoil fell by 0.11%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.
Oil prices were not much changed, as traders were cautious in anticipation of the U.S. Tariffs that are due to be announced by 2000 GMT. They feared they would exacerbate a trade war globally and reduce demand for crude.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Five dealers report that India's imports of palm oil in March were up from the previous months, but they remained below the normal level for the fourth month running. The premium it commands over soyoil has prompted refiners and buyers to increase their soyoil purchases.
Exports in March rose between 0.4% to 3.9%, according to cargo surveyors.
The palm ringgit's trade currency has weakened by 0.36% compared to the dollar. This makes the commodity more affordable for buyers who hold foreign currencies. ($1 = 4.4510 ringgit)
(source: Reuters)
