Palm oil gained for the first time in six days after West Texas Intermediate crude surged above $100 a barrel for the first time since September, boosting demand for vegetable oils as biofuel feedstock.
The contract for September delivery advanced 1.1 percent to close at 2,365 ringgit ($741) a metric ton on the Bursa Malaysia Derivatives. Futures yesterday closed at the lowest price for the most active futures since May 21. Palm for local physical delivery in July was at 2,360 ringgit, data compiled by Bloomberg show.
Crude for delivery in August gained as much as 2.6 percent to $102.18 a barrel in New York on shrinking U.S. stockpiles and concern that political turmoil in Egypt may disrupt Middle Eastern supply. A record 5.6 million tons of palm was used for fuel in 2012, according to Oil World, a Hamburg-based research company.
“Crude oil’s strength may encourage some biodiesel demand to come in,” Chandran Sinnasamy, head of trading at LT International Futures Sdn., said by phone from Kuala Lumpur. “The Ramadan demand is still there,” he said, referring to the Muslim fasting month.
Palm oil exports from Malaysia, the second-largest producer, increased 7 percent to 1.35 million tons in June from a month earlier, surveyor Intertek said on July 1. Consumption typically increases during Ramadan, which starts this month, as observers break day-long fasts with communal meals.
Soybean oil for December delivery rose 0.6 percent to 45.88 cents a pound, while soybeans for delivery in November climbed 1.3 percent to $12.585 a bushel.
Refined palm oil for January delivery dropped 0.2 percent to close at 5,888 yuan ($960) a ton on the Dalian Commodity Exchange, while soybean oil for delivery in the same month declined 0.5 percent to end at 7,322 yuan.
Source: Bloomberg, press release, 2013-07-03.