SINGAPORE: Malaysian palm oil futures extended gains on Thursday, buoyed by strength in rival edible oils and a softer ringgit, although lacklustre exports and weaker crude oil prices limited gains. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange closed up 83 ringgit or 2.2%, to 3,759 ringgit ($785.66) a metric ton, recording its steepest gains in two weeks.
The Malaysian ringgit, palm’s currency of trade, weakened 0.2% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Palm oil is showing an upward trajectory, driven by the strong momentum in soyoil prices on the Chicago Board of Trade, as well as a rebound in Chinese vegetable oils amid anticipation of a stimulus package, said Anilkumar Bagani, commodity research head of Sunvin Group India.
China is set to unleash fresh fiscal stimulus to shore up its economic recovery, drawing on a well-used playbook that relies heavily on debt and state spending.
Dalian’s most-active soyoil contract rose 2.6%, while its palm oil contract was up 2.9%.
Soyoil prices on the Chicago Board of Trade were up 1.4%. Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.
Malaysian palm oil product exports for Oct. 1-Oct. 25 were estimated to have fallen between 1.1% and 3.1% from a month earlier, data from independent inspection company AmSpec Agri Malaysia and Intertek Testing Services showed on Wednesday.
Oil prices fell on Thursday after a rise in US crude stockpiles and a climb in the dollar index, giving up some ground gained a day earlier when prices jumped on Middle East tensions.
Weaker crude makes palm a less attractive option for biodiesel feedstock.
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