JAKARTA: Malaysian palm oil futures closed higher on Thursday after hitting their highest level in more than three months, amid expectations of tighter supply and stronger demand from biodiesel sector as crude prices surge.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained RM87, or 1.88 per cent, to RM4,709 (US$1,152.19) a tonne at the close.
The contract touched RM4,721 earlier in the session, its highest level since April 8.
“Funds are pushing for a credible breakout, supported by looming El Nino-related risks, expectations of lower production in Q4 in 2026 and H1 of 2027, biodiesel demand prospects amid Middle East tensions and anticipated festive demand from India,” said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading firm.
Dalian’s most-active soyoil contract gained 0.75 per cent, while its palm oil contract rose 2.85 per cent. Soyoil prices on the Chicago Board of Trade increased 0.84 per cent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Malaysian crude palm oil is expected to trade between RM4,400 and RM4,650 (US$1,076 and US$1,137) per tonne in August, the Malaysian Palm Oil Council said on Wednesday.
Oil prices hit their highest in more than a month on Thursday, rising for a fifth day, as escalating hostilities between the United States and Iran stoked fears of supply disruptions across oil transit routes.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
India’s edible oil imports are projected to climb between July and October as slower soybean and rapeseed crushing erodes domestic supplies ahead of peak festive demand.
The 2026/27 soybean crop in Brazil, set to be sown around September, is expected to fall two per cent to 178 million tonnes from a record last cycle, while challenging market conditions may lead to a stabilisation in the planted area, Rabobank said on Thursday.
Source : NST
