KUALA LUMPUR: Malaysian palm oil futures rose on Friday, tracking gains in the Chicago soyoil contract and a weaker ringgit.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 70 ringgit, or 1.67%, to 4,252 ringgit ($1,004.49) a metric ton during early trade.
Palm oil down on weak Chicago soyoil; firmer crude oil
The contract has so far gained 3.23% this week.
Fundamentals
Soyoil prices on the Chicago Board of Trade were up 0.47%. Dalian’s vegetable oil markets were closed for China’s Golden Week holiday.
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 0.33% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil prices rose in early Asian trade, holding on to their strong weekly gains, as investors weighed the Middle East conflict and potential disruptions in crude flows against an amply-supplied global market.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
India’s palm oil imports in September fell by nearly a third compared to the previous month, hitting a six-month low as a surge in tropical oil prices made it more expensive than rival oils, forcing refiners to postpone purchases, dealers said.
India on Thursday approved a 101 billion-rupee ($1.2 billion) programme to double edible oil production within seven years, aiming to reduce dependence on costlier imports.