Palm Oil Futures Surge on Crude Price Rise and Rival Vegetable Oils Gains
Palm oil futures on the Bursa Malaysia Derivatives rose 2% to 4,992 ringgit ($1,238) per ton on September 1, extending gains for a second consecutive session.
The increase was driven by stronger crude oil prices, which have risen due to renewed tensions between the US and Iran and concerns over possible supply disruptions from the Middle East. This makes palm oil more competitive as a biodiesel feedstock.
Rival vegetable oils also contributed to the market's support. Chicago soyoil futures gained 2.33%, while on the Dalian exchange, soyoil rose 1.01% and palm oil added 1.07%. The widening discount of palm oil to gasoil also supported prices.
The Malaysian export data for August showed a decline of 14.9% in exports of palm oil products compared to July. However, this did not significantly impact the market, which is also keeping an eye on Indonesia's September crude palm oil reference price set at $1,007.51 per ton.