MUMBAI, 18 July (Commoditiescontrol): Malaysian crude palm oil (CPO) futures continued their upward trajectory for the third consecutive session on Thursday, driven by stronger rival Dalian and Chicago contracts, as well as bargain buying.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed 6 ringgit higher, or 0.15%, at 3,938 ringgit ($844.16) per metric ton. Initially, the contract opened 24 ringgit lower and traded mostly sideways despite weaker rival edible oils, according to a Kuala Lumpur-based trader.
Bargain buying helped lift the contract to a high of 3,941 ringgit before it settled 1 ringgit lower at the midday close. Dalian's most-active soyoil contract saw a rise of 0.76%, while its palm oil contract increased by 0.53%. Soyoil prices on the Chicago Board of Trade were also up by 0.57%.
Price movements in related oils, such as soyoil, significantly influence palm oil prices due to their competition in the global vegetable oils market. Additionally, oil prices extended gains, supported by a larger-than-expected decline in U.S. crude stockpiles. This makes palm oil a more attractive option for biodiesel feedstock as firmer crude oil futures improve its competitiveness.
The ringgit, the currency used for palm oil trade, weakened by 0.11% against the dollar, making palm oil cheaper for buyers holding foreign currencies. Furthermore, Malaysia maintained its August export tax for crude palm oil at 8.0% and increased its reference price, according to a circular on the Malaysian Palm Oil Board website.
These factors combined to support the upward movement in palm oil futures, reflecting the commodity's responsiveness to global market dynamics and currency fluctuations.
(By Commoditiescontrol Bureau; +91 98201 30172)
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