KUALA LUMPUR: Malaysian palm oil futures rose for a second consecutive session on Tuesday, supported by firmer rival soyoil prices and anticipation of production declines in Malaysia.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 35 ringgit or 0.74%, to 4,734 ringgit ($1,062.63) a metric ton at the close.

The palm market is reacting to stronger soyoil prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

“Palm oil has also been seeing a lot of selling pressure of late and given the anticipation of weaker output in Malaysia as well as positive sentiment in the soyoil market, the market is looking for catalyst that can drive it higher,” he said.

The Malaysian Palm Oil Board is expected to release its monthly supply-demand data for November on Dec. 10.

Dalian’s most-active soyoil contract fell 0.05%, while its palm oil contract gained 1.48%. Soyoil prices on the Chicago Board of Trade added 3.07%.

Malaysian palm oil higher on stronger rival oils

Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

The ringgit, palm’s currency of trade, weakened 0.31% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.

Oil prices edged higher after falling in the previous session as investors took stock of a potential ceasefire between Israel and Hezbollah, weighing on oil’s risk premium.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Rapeseed and mustard planting in India will likely drop as above-average temperatures during the sowing season prompted farmers to switch to crops less affected by heat but offer equally good returns, industry officials told Reuters. Lower production of India’s main winter-sown oilseed crop could force the country to increase expensive imports of cooking oils such as palm oil, soyoil and sunflower oil to meet demand.