KUALA LUMPUR: Malaysian palm oil futures jumped more than 4% on Wednesday, driven by gains in crude oil prices and Chicago soyoil.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 190 ringgit, or 4.74%, at 4,196 ringgit ($1,006.72) a metric ton at the close, its highest daily gain since July 3, 2023.

The contract rose 4.79% to an intra-day high of 4,198 ringgit a metric ton earlier in the session. It also gained 5.03% for two straight sessions.

Crude palm oil futures rose in the second session as they followed the continued uptrend in Chicago soyoil and crude oil, coupled with traders rushing to cover shorts, a Kuala Lumpur based trader said.

Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, added the CPO rose following a strong undercurrent in energy prices after Iran fired ballistic missiles towards Israel.

Palm bounces back on Indonesia’s October reference price hike

“The added support also came from a weaker ringgit and the bullish momentum in Chicago soyoil. India’s sharply lower vegetable oil imports in September of around just 1.06 million tons will also require more buying to replenish the upcoming festival demand,” he said.

Oil prices climbed more than 2% on rising concerns that Middle East tensions could escalate, potentially disrupting crude output from the region, following Iran’s biggest ever military blow against Israel.

Brent crude futures for December were up 2.91% at $75.70 a barrel, as of 1026 GMT. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Soyoil prices on the Chicago Board of Trade rose 2.91%. Dalian’s vegetable oil markets were closed for the Golden Week holiday in China.

Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.

The ringgit, palm’s currency of trade, weakened 0.17% against the dollar, making the commodity cheaper for buyers holding foreign currencies.