NEW DELHI: Malaysian palm oil futures rose on Wednesday due to rising exports, buoyant Chinese demand and stronger Chicago soyoil prices.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange rose 1.03% to 3,823 ringgit ($806.88) a metric ton by midday trade.
“Short-term export outlook looks good and then there is a good deal of demand from China,” said a New Delhi-based dealer.
Exports of Malaysian palm oil products for Oct. 1-15 rose 5.6% from a month earlier, independent inspection company AmSpec Agri Malaysia said on Sunday.
Another cargo surveyor, Intertek Testing Services, said that exports rose 7.3%.
Malaysia has maintained its November export tax for crude palm oil at 8% and lowered its reference price, a circular on the Malaysian Palm Oil Board website showed on Tuesday.
Malaysian palm oil futures climb
Soyoil prices on the Chicago Board of Trade rose 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Further underpinning prices, Southern Peninsular Palm Oil Millers Association data showed production in the first half of October fell by 0.73% month-on-month, LSEG Agriculture Research said in a note late Monday.
Oil prices surged on Wednesday as tension escalated in the Middle East after hundreds were killed in a blast at a Gaza hospital, sparking concerns about potential oil supply disruptions from the region.
Stronger crude oil prices make palm a more attractive option for biodiesel feedstock.