MUMBAI, 4 Oct (Commoditiescontrol): Malaysian crude palm oil (CPO) futures ended higher on Friday, closing the week with strong gains, driven by escalating tensions in the Middle East. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose by 123 ringgit, or 2.94%, to 4,305 ringgit ($1,021.35) per metric ton at closing. This represents a weekly increase of 6.27%, the highest since June 2023.
The surge in palm oil prices reflects a broader rally in crude oil, fueled by concerns that the ongoing Middle East conflict could disrupt global oil supplies. Palm oil has also begun trading at a premium over both soybean and sunflower oils, according to market traders.
In global markets, soyoil prices on the Chicago Board of Trade increased by 0.92%, reaching $44.94. Meanwhile, China’s Dalian vegetable oil markets were closed due to the Golden Week holiday. In India, sunflower oil is currently priced at ₹1,175.50 ($14.00) per 100 kg on the National Commodity and Derivatives Exchange.
Palm oil prices often track the movement of rival edible oils as they compete for a share of the global vegetable oils market. Despite a slight strengthening of the ringgit by 0.07% against the dollar, making palm oil more expensive for foreign buyers, the upward trend persisted.
Crude oil prices also rose further on Friday, with strong weekly gains driven by fears of potential disruptions in supply amid the Middle East conflict. Higher crude oil prices make palm oil a more attractive option for biodiesel feedstock, boosting demand for the commodity.
However, India’s palm oil imports dropped by nearly a third in September, hitting a six-month low. The sharp rise in tropical oil prices made palm oil less competitive, leading refiners to delay purchases. In response to this dependency on expensive imports, India recently approved a Rs 10,100 crore ($1.2 billion) program aimed at doubling domestic edible oil production within the next seven years.
The palm oil market remains closely linked to global energy trends, with the current geopolitical tensions and rising crude oil prices creating a bullish environment for palm oil futures.
(By Commoditiescontrol Bureau; +91 98201 30172)
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