PALM oil gained the most in eight days after a rally in crude oil increased the prospects of biofuels made from the tropical commodity.
Trading of the benchmark contract resumed after a two-day holiday marking the Chinese Lunar New Year. Crude oil in New York climbed the most in more than four months yesterday and soybean oil, the main substitute for palm oil, added 3 per cent.
April-delivery palm oil futures rose as much as 1.8 per cent to RM2,625 (US$775) a metric ton on the Malaysia Derivatives Exchange and traded at RM2,622 at 11:42 a.m. Prices gained 2.3 per cent last week.
The tropical commodity remains in “a structural up-cycle” and may average RM2,800 this year and RM3,500 next year, “supported by a resumption of U.S. dollar weakness, higher crude oil prices and tight edible oil stocks,” Adrian Foulger, an analyst at Standard Chartered Bank, said today.
Palm oil advanced 52 per cent as the dollar fell 4.2 per cent against six major currencies and crude oil surged 78 per cent, according to Bloomberg data.
Crude oil in New York for March delivery surged 3.9 per cent to US$77.01 a barrel yesterday, and added 0.2 per cent to US$77.28 at 11:43 a.m. Singapore time. The dollar index was little changed, rising 0.05 per cent to 79.687 at 11:07 a.m. Singapore time after falling 0.9 per cent yesterday.
Chinese markets remain closed for the week. – Bloomberg
Source : Business Times