The palm oil market is turning around as rival oils and crude oil prices rise

The palm oil market is turning around as rival oils and crude oil prices rise

Malaysian palm oil futures rebounded on Tuesday after declining for two sessions, supported by gains in rival edible oils and crude oil prices. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained RM31, or 0.67 per cent, to RM4,660 (US$1,137.70) a metric ton in early trade.

Dalian's most-active soyoil contract rose 0.62 per cent, while its palm oil contract added 0.41 per cent. Soyoil prices on the Chicago Board of Trade were up 0.09 per cent.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices rebounded slightly after plunging in the previous session, on concerns Middle Eastern supply remains at risk as a diplomatic resolution to the US-Iran war that has disrupted shipments still seems unlikely. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm's currency of trade, weakened 0.07 per cent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Malaysia's palm oil inventories are expected to rise to a five-month high in July, as production growth outpaced robust demand, a Reuters survey showed. Indonesia exported 11.28 million metric tons of crude and refined palm oil in the January to June period, up 2.5 per cent from the same period a year earlier, statistics bureau data showed.

Asian markets made cautious gains at the start of trading as investors followed a global rally, with oil prices holding near the lowest levels in weeks as the US-Iran conflict remained at a stalemate.

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Source: Online/OFA