NEW DELHI: Malaysian palm oil futures edged higher on Wednesday due to rising exports, buoyant Chinese demand and stronger Chicago soyoil prices.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange rose 0.69% to close at 3,810 ringgit ($803.46) a metric ton.
Palm oil demand from overseas markets is expected to remain strong during the next few weeks, a New Delhi-based dealer said. Exports of Malaysian palm oil products for Oct. 1-15 rose 5.6% from a month earlier, independent inspection company AmSpec Agri Malaysia said on Sunday. Another cargo surveyor, Intertek Testing Services, said exports rose 7.3%.
Malaysia has maintained its November export tax for crude palm oil at 8% and lowered its reference price, a circular on the Malaysian Palm Oil Board website showed on Tuesday.
Soyoil prices on the Chicago Board of Trade rose 0.4%. Palm oil is affected by the prices of related oils as they compete for a share of the global vegetable oils market.
Further underpinning prices, Southern Peninsular Palm Oil Millers Association data showed production in the first half of October fell by 0.73% month-on-month, LSEG Agriculture Research said in a note late Monday.
Oil prices surged nearly 2% on Wednesday as tensions escalated in the Middle East after hundreds were killed in a blast at a Gaza hospital, sparking concerns about potential oil supply disruptions from the region.
Stronger crude oil prices make palm a more attractive option for biodiesel feedstock.
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