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Malaysian palm oil futures closed higher for a fifth straight session on Monday, buoyed by stronger Chicago soyoil prices and rising crude oil prices.
The benchmark palm oil contract for April delivery on Bursa Malaysia Derivatives rose 84 ringgit, or 1.96%, to close at 4,373 ringgit ($978.30) a tonne. The contract has gained 2.36% over the past four sessions.
Crude palm oil (CPO) futures edged higher, extending gains carried over from Chicago soyoil futures since last Friday and through Asian trading hours, according to Anilkumar Bagani, head of commodity research at Mumbai-based Sunvin Group.
Bagani added that tariffs imposed by US President Donald Trump on imports from Mexico, Canada and China had pushed US soyoil prices higher.
"The strong rebound in global energy prices and short-covering in crude palm oil futures also contributed to the price recovery," he said.
Soyoil prices on the Chicago Board of Trade (CBOT) rose 2.15%, while the Dalian Commodity Exchange remained closed from 28 January to 4 February for the Lunar New Year holiday.
Palm oil tracks price movements in competing vegetable oils as it competes for a share of the global vegetable oils market.
Oil prices rose after Trump imposed tariffs on Canada, Mexico and China, stoking fears of supply disruptions, though gains were capped by concerns that a trade war could hurt the broader economy.
Stronger crude oil futures make palm oil a more attractive option for use as biodiesel feedstock.
The ringgit, palm oil's trading currency, weakened 0.45% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
Shipping surveyors estimated that Malaysian palm oil exports in January fell by between 12.3% and 20.1%.
Indonesia lowered its reference price for crude palm oil for February to $955.44 a tonne, from $1,059.54 in January, according to a Trade Ministry official. The February export tax was set at $124 a tonne, down from $178 the previous month.
Source: Reuters