JAKARTA: Malaysian palm oil futures closed higher for a third straight session on Wednesday, buoyed by stronger crude oil prices and gains in rival edible oils on the Dalian market.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 17 ringgit, or 0.36%, to 4,699 ringgit ($1,151.72) a metric ton at the close.
“The FCPO is tracking Dalian performance and crude oil prices today,” a Kuala Lumpur-based trader said.
Oil prices edged higher on Wednesday after an attack on the headquarters of Saudi Arabia’s state-owned oil company, while Iranian officials told Reuters they were deploying new tactics to target ships, seeking to keep oil prices high and influence the US midterm elections.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract rose 0.71%, while its palm oil contract gained 0.98%. Soyoil prices on the Chicago Board of Trade were up 0.03%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Malaysia has lowered its November crude palm oil reference price, a change that maintains the export duty at 10%, a circular on the Malaysian Palm Oil Board website showed on Wednesday.
Malaysia’s palm oil stockpiles in September surged to 3.51 million metric tons as production hit an all-time high, surpassing market expectations and reaching levels that were once thought impossible.
Cargo surveyors estimated that exports of Malaysian palm oil products for October 1-10 rose between 33.5% and 37.7% from a month earlier.
The ringgit, palm’s currency of trade, strengthened 0.1% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.