Palm oil prices on the European vegetable oils market rebounded on Monday following a surge in crude oil prices, which benefits biodiesel producers, as well as an uptrend in both Malaysian and US markets. Asking prices for crude palm oil ranged from $7.50 to $12.50 a tonne higher. Prices fell around $12.50 to $17.50 last week.
In Malaysia, palm oil futures chalked up their biggest daily gain in four months on Monday, tracking an uptrend in crude oil prices and supported by soyoil on the US Chicago Board of Trade. Crude oil prices rose to their highest since late 2014 on Monday, boosted by the latest troubles for Venezuelan oil company PDVSA and a looming decision on whether the United States will re-impose sanctions on Iran.
Palm oil prices are affected by movements of crude oil because palm is used as feedstock for biodiesel. Rising crude oil prices in recent weeks have made biodiesel production more economical, with gas oil's price premium over palm widening to $58 a tonne on Monday. Palmkernel oil asking prices rose between $25 and $45 a tonne, while coconut oil gained between $20 and $35 a tonne. EU rapeseed oil offers rose 5 euros per tonne, also supported by a weaker euro against the dollar.
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