Palm oil jumps more than 3pc on stronger Dalian oils, higher exports
- Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
KUALA LUMPUR: Malaysian palm oil futures rose more than 3pc on Monday and hit a three-week high as rival Dalian oils surged and shipments to India gained pace ahead of Diwali festival next month.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 93 ringgit, or 3.19pc, to 3,004 ringgit ($726.31) by the midday break, extending gains into a sixth session.
The contract added 7.5pc last week as heavy rains and widening coronavirus restrictions raised output concerns.
A bullish supply report from the US Department of Agriculture (USDA) combined with strong gains in Dalian edible oils boosted palm oil prices, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari Sdn Bhd.
US soybean stocks were pegged at a five-year low, smaller than previously forecast, on rising exports and as adverse weather reduced the acreage that farmers will harvest, according to the USDA's monthly World Agricultural Supply and Demand Estimates report.
Dalian's most-active soyoil contract rose 2.82pc, while its palm oil contract gained 4.25pc. Soyoil prices on the Chicago Board of Trade were up 0.97pc.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Further aiding sentiment, data from cargo surveyors showed palm oil exports from Malaysia during Oct. 1-10 rose between 12.4pc and 13.3pc from a month earlier.
Cargo surveyor Intertek Testing Services estimated shipments to the Indian subcontinent, which is set to celebrate Diwali in mid-November, rose 60pc in the first 10 days of October.
Meanwhile, data released by the Malaysian Palm Oil Board during the midday beak showed Malaysia's palm oil end-September inventories rose 1.24pc from the month before to a three-month high of 1.73 million tonnes.
Although the rise in stockpile was within market expectations, the growth in production and exports was much lower than expected, traders and analysts said.
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