Palm oil prices rise for the second day in a row on stronger soyoil and Malaysian production concerns
Malaysian palm futures gained for a second session in a row on Thursday. This was largely due to higher soyoil and production concerns from the second largest producer of palm oil.
The benchmark palm-oil contract for December delivery at the Bursa Derivatives exchange closed 34 ringgit or 0.88% higher, closing at 3,879 Ringgit ($921.82) per metric ton.
Earlier in the session, the contract reached a high of 3,967 Ringgit per metric ton before reversing the gains.
A Mumbai-based dealer stated that the rebound in soyoil is supporting Malaysian Palm Oil Futures. Production concerns in Malaysia are also contributing to this support.
Dalian's palm oil contract grew by 3.6%, while the most active soyoil contract increased by 1.21%. Chicago Board of Trade soyoil prices were up by 0.05%.
As they compete to gain a share in the global vegetable oil market, palm oil monitors prices of competing edible oils.
The palm ringgit's currency has strengthened by 0.87% in relation to the U.S. Dollar, increasing the price of the commodity for buyers who hold foreign currencies.
The oil prices rose Thursday, following a significant interest rate reduction by the U.S. Federal Reserve. However, Brent was still at its lowest level of the year - below $75 - on the expectation of weaker demand globally.
Brent crude futures were up 1.19 % at $74.53 per barrel by 1000 GMT. Palm oil is more appealing as a biodiesel feedstock due to the firmer crude oil prices.
The Malaysian Palm Oil Council said that the price of crude palm oil is expected to stay stable in this month as tighter supplies are offset by a stronger ringgit and stagnant exports.
MPOC said that prices will be trading between 3,850-4,050 Ringgit per metric ton in September.
A leading importer said on Wednesday that despite the recent increase in import duties, cooking oils are still affordable.
(source: Reuters)
