Palm surges due to Middle East conflict and records the highest weekly gain since 16 months
Malaysian palm futures ended higher on Friday and posted a weekly gain, driven by an intensifying conflict in the Middle East.
The benchmark palm-oil contract for December delivery at the Bursa Derivatives Exchange in Malaysia rose by 123 ringgit or 2.94% to 4,305 Ringgit ($1,021.35) per metric ton.
The contract recorded a weekly increase of 6.27%. This is the highest gain since June 2023.
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 in crude oil due to the conflict in the Middle East.
The trader stated that palm oil was now trading at a higher price than soybean oil and sunflower oil.
Chicago Board of Trade soyoil was up 0.92% to $44.94. Dalian's markets for vegetable oil 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 dollars) per 100 kilograms.
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, has risen by 0.07%, increasing the price of the commodity for buyers who hold foreign currencies.
Oil prices continued to rise on Friday, and investors were on course for a strong weekly gain as they weighed the possibility of a larger Middle East conflict disrupting crude flow against an oversupplied global market.
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. The drop was due to a rise in tropical oil prices, which made it more costly than other oils and forced refiners into postponing purchases.
India approved a program 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 = 4.2150 rupees; 1 rupee = 83.9540 Indian Rupees). (Reporting and editing by Ashley Tang, Varun H K, and Shrey Biswas.)
(source: Reuters)
