Key Takeaways
- Malaysian palm oil futures gained for a third consecutive session.
- Prices rose due to stronger crude oil prices and gains in rival edible oils.
- Malaysia's palm oil stockpiles hit an all-time high in September.
Malaysian palm oil futures continued their upward trend for a third consecutive session, closing higher on Wednesday. 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.
The rise in palm oil prices was driven by stronger crude oil prices and gains in rival edible oils on the Dalian market, according to a Kuala Lumpur-based trader. Oil prices edged higher after an attack on the headquarters of Saudi Arabia’s state-owned oil company, and Iranian officials stated they were deploying new tactics to target ships, aiming to keep oil prices high and influence the US midterm elections.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. 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%.
Malaysia has lowered its November crude palm oil reference price, a change that maintains the export duty at 10%, according to a circular on the Malaysian Palm Oil Board website. This decision was made despite the surge in palm oil stockpiles, which reached 3.51 million metric tons in September, surpassing market expectations and reaching levels 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.
A trader based in Kuala Lumpur commented, 'The FCPO is tracking Dalian performance and crude oil prices today.' This statement underscores the interdependence of palm oil prices with global market dynamics and the impact of geopolitical events on commodity prices.
The FCPO is tracking Dalian performance and crude oil prices today.
A Kuala Lumpur-based trader, Trader
