VEGOILS - Palm oil rises by more than 4%, the biggest increase in over a month on higher oil and soyoil
The price of crude oil and Chicago soyoil drove the increase in Malaysian palm oils futures by more than 4%.
At the close of the day, the benchmark palm oil contract on Bursa Derivatives Malaysia Exchange for December delivery rose by 190 ringgit or 4.74% to 4,196 ringgit (1,006.72) per metric tonne, the highest gain recorded since July 3, 2023.
The contract rose by 4.79%, reaching an intraday high of 4198 ringgit per metric ton in the first session. The contract also rose 5.03% in two consecutive sessions.
A Kuala Lumpur-based trader stated that Crude Palm Oil Futures increased in the second session, as traders were rushing to cover their shorts and followed the uptrend of Chicago Soyoil, along with crude oil.
Anilkumar bagani, head of research at Mumbai-based Sunvin Group vegetable oils, said that the CPO increased following a rise in energy prices, after Iran launched ballistic missiles against Israel.
The added support came also from the weaker ringgit, and the bullish momentum of Chicago soyoil. India's lower than expected vegetable oil imports of just 1,06 million tons in September will require additional purchases to meet the festival demand, he added.
After Iran's largest ever military strike against Israel, oil prices rose more than 2%, as concerns grew that tensions in the Middle East could escalate and disrupt crude production from the region.
Brent crude futures were up by 2.91% to $75.70 per barrel as of 1026 GMT. Palm oil is more appealing as a biodiesel feedstock due to the stronger crude oil futures.
The Chicago Board of Trade reported a 2.91% increase in soyoil. Dalian's markets for vegetable oil were closed during the Golden Week holidays in China.
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 0.17%, making the commodity more affordable for buyers who hold foreign currencies.
(source: Reuters)
