Palm oil prices rise amid escalating conflict in the Middle East, making it the best week for 16 months
Malaysian palm futures were up on Friday due to a growing conflict in the Middle East. They are on course for their biggest weekly gain since 2023.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery rose by 88 ringgit or 2.1% to 4,270 Ringgit ($1,009.93).
This week, the contract has gained 5.41%.
A Mumbai-based trader at a global trading house stated that the palm oil market has been experiencing a bullish run. This is mirrored by the rally of crude oil in response to the Middle East conflict.
The trader stated that palm oil was now trading at a higher price than soybean oil and sunflower oil.
The Chicago Board of Trade reported that soyoil was up 0.7% at $44.84. Dalian's markets for vegetable oils were closed during China's Golden Week.
The National Commodity and Derivatives Exchange of India currently trades sunflower oil at 1,175.50 Rupees ($14.00 per 100 kg).
As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.
The palm ringgit's trade currency, the dollar, fell by 0.24%, lowering the price of the commodity for buyers who hold foreign currencies.
Oil prices were little altered on Friday but still on track to make strong gains for the week as investors weighed up the possibility of a Middle East conflict disrupting crude flow against a global market that is well supplied.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Dealers said that India's imports of palm oil in September dropped by almost a third from the previous month. It also hit a six-month high as a rise in tropical oil prices forced refiners into postponing purchases.
India approved a programme worth 101 billion rupees ($1.2 billion) to double the production of edible oil within seven years. The aim is to reduce dependency on expensive imports. (1 ringgit = 4.2280 rupees; 1 rupee = 83.9540 Indian Rupees). (Reporting and editing by Ashley Tang.
(source: Reuters)
