Palm prices rise on higher soyoil and crude oil prices; second week of gains expected
Malaysian palm futures rose more than 2% Friday on the back of higher soyoil, crude oil and positive estimates for domestic exports.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery gained 134 Ringgit or 2.85% to 4,830 Ringgit ($1,103.24).
The contract has gained 3.53% this week, and is expected to gain a second consecutive weekly.
David Ng is a proprietary trader with Kuala Lumpur's Iceberg X Sdn. Bhd. He said that the palm market was reacting to higher soyoil prices and crude oil.
The recent export growth is also sustaining the positive sentiment on the palm oil markets.
Intertek Testing Services estimates that the exports of palm oil products from Malaysia rose by 11.5% in October. AmSpec Agri Malaysia will release its data later today.
Dalian's palm oil contract grew by 2.12%, while the most active soyoil contract increased by 1.73%. Chicago Board of Trade soyoil prices rose 1.77%.
As palm oil competes to gain a share of the global vegetable oils industry, it tracks price changes in rival edible oils.
The oil prices continued to rise, gaining more than $1 per barrel, to reduce weekly losses. Geopolitical tensions increased in the Middle East following reports that Iran would be preparing an attack on Israel in the near future from Iraq.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's currency has weakened by 0.09% in relation to the U.S. Dollar, making it cheaper for foreign buyers.
A trade ministry official said that Indonesia increased its crude palm oil price reference for November from $893.64 per metric ton to $961.97. This is up from $893.64. The new price means that the November export tax will be $124 per metric ton. ($1 = 4,3780 ringgit). (Reporting and editing by Ashley Tang, Sumana Nady)
(source: Reuters)
