Palm oil gains tracking rival oils, higher crude prices

Malaysian palm oil futures closed higher on Monday, tracking stronger rival edible oils and higher crude prices, and also supported by a weaker ringgit.

The benchmark palm oil contract FCPO1! for September delivery on the Bursa Malaysia Derivatives Exchange gained 58 ringgit, or 1.39%, to 4,232 ringgit ($995.76) a metric ton at the close.

"Prices are supported by firm crude oil, which continues to bolster edible oil markets globally," Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova, said.

"The slight weakness in the ringgit has also sustained buying interest, making Malaysian palm oil more competitive internationally."

Dalian's most-active soyoil contract (DBYcv1) increased 0.3%, while its palm oil contract CPO1! gained 0.71%. Soyoil prices on the Chicago Board of Trade ZL1! rose 0.8%.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Oil prices rose on Monday and reached their highest level in three weeks , as investors eyed further U.S. sanctions on Russia that may affect global supplies, while higher oil imports by China also offered support.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit USDMYR, palm's currency of trade, slightly weakened 0.02% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

India's palm oil imports jumped to an 11-month high in June as refiners ramped up purchases due to a price discount compared to rival soyoil and sunflower oil, and to replenish depleted inventories, an industry body said on Monday.

Malaysia's palm oil stocks rose 2.41% to an 18-month high of 2.03 million tons at the end of June, industry regulator data showed.

Exports of Malaysian palm oil products during July 1-10 were estimated to have risen between 5.3% and 12% from a month earlier, according to data from cargo surveyor Intertek Testing Services and inspection company AmSpec Agri Malaysia.

($1 = 4.2500 ringgit)