Malaysian palm oil futures rose for a fourth day on Thursday after touching a four-year high intraday, as it tracked a rally in soyaoil on the Chicago Board of Trade (CBOT) on latest US government biodiesel requirements. Weakness in the ringgit against the dollar also helped palm oil as it makes the tropical oil cheaper for foreign buyers. The Malaysian currency touched its lowest since September 29, 2015, tracking slides in most government bond prices.
Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange were up 1.7 percent at 3,005 ringgit ($676.04) a tonne, closing at its highest in nearly two weeks. Traded volumes stood at 39,467 lots of 25 tonnes each. Palm oil futures rose as much as 4.9 percent soon after the market opened, touching their highest since September 2012, tracking the overnight soyaoil market, traders said.
CBOT soyaoil futures surged nearly 7 percent on Wednesday after the US government released final requirements for biofuel use for next year. "The biodiesel requirements will boost demand for soyabean oil and indirectly for palm oil as well, which is its near perfect substitute," said Adhi Tasmin, a palm analyst with Maybank Kim Eng Securities in Jakarta.
However, rising production and concerns over possible demand disruption in India are expected to cap the rally in palm prices, Tasmin said. The January soyabean oil contract on the Dalian Commodity Exchange rose 2.6 percent, while the January contract for palm olein climbed 0.6 percent. Trading in Chicago is closed on Thursday for Thanksgiving holiday.