Palm oil rises for second straight session on crude strength

JAKARTA: Malaysian palm oil futures surged for a second consecutive day on Tuesday, mirroring the rise in crude oil prices. The Bursa Malaysia Derivatives Exchange's main palm oil contract for November delivery climbed 46 ringgit, or 0.95%, to 4,896 ringgit ($1,200.59) per metric ton by midday. Research head Anilkumar Bagani of Sunvin Group explained that the rise in energy prices spurred palm oil futures higher.

He noted that tightness expectations next year, owing to Indonesia's B50 biodiesel mandate and potential El Niño-induced production cuts, provided further support. Oil prices climbed on Tuesday due to persistent concerns over supply disruptions following attacks on Saudi Arabian energy infrastructure, which knocked out the East-West pipeline and raised doubts about efforts to mitigate shipping risks in the Gulf.

As a result, stronger crude oil futures made palm oil a more appealing choice for biodiesel feedstock. Dalian's top-soyoil contract declined 0.91%, while its palm oil contract slipped 0.38%. Soyoil prices on the Chicago Board of Trade were marginally up 0.07%. Like other edible oils, palm oil vies for a slice of the global vegetable oils market.

The Malaysian ringgit, palm's trade currency, slipped 0.1% against the dollar, making the commodity less expensive for foreign currency holders. Technical analyst Wang Tao from Reuters anticipates palm oil could climb further into the 4,930 ringgit to 4,964 ringgit per metric ton range, following its break above a falling trendline.