Palm oil gains as crude prices climb higher

JAKARTA: Malaysian palm oil futures surged Monday, buoyed by higher crude oil prices and a weaker ringgit, according to reported trader sentiment. The Bursa Malaysia Derivatives Exchange's benchmark palm oil contract for November delivery surged 1.29% to 4,876 ringgit ($1,198.03) per metric ton by midday, a trader explained. The rise is attributed to traders’ expectations of growing demand for bio-diesel, a derivative of palm oil.

Oil prices skyrocketed more than 3% on Monday following Houthi strikes in Saudi Arabia and Iranian attacks on Gulf ships, heightening supply worries after a major Saudi oil pipeline was shut down. Palm oil's strength makes it a more appealing option for biodiesel production. Conversely, soyoil prices in Dalian saw a minor decline.

The Chicago Board of Trade's most-active soyoil contract slipped 0.46%, while its palm oil contract fell 0.87%. Palm oil trends with other edible oils in the global vegetable oil market. The Malaysian ringgit, the commodity's trading currency, slipped 0.12% against the US dollar, making palm oil more affordable for foreign buyers.

Cargo surveys indicate that Malaysian palm oil exports from September 1 to 10 dropped between 11.7% and 17.5% compared to the previous month. Analysts warn that palm oil could test support levels at 4,788 ringgit per metric ton, as per Reuters' technical assessment by Wang Tao.