Palm oil climbs on Malaysia plantation closures, firmer rival oils

KUALA LUMPUR: Malaysian palm oil futures rose for the fourth session on Thursday on supply concerns as some plantations in Malaysia remain shut amid the coronavirus pandemic, while the strength in crude and rival oils also supported prices.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 29 ringgit, or 1.23 per cent, to 2,386 ringgit per tonne during early trade.

FUNDAMENTALS

Malaysia's biggest palm oil-producing state, Sabah, will continue to close palm operations in six districts as part of its coronavirus-containment measures until it has enough details that the plantations and mills are safe to reopen, the state said on Wednesday.

Crude futures rose on Thursday on expectations the world's largest oil producers would agree to cut production at a meeting later in the day as the industry grapples with the coronavirus-driven collapse in global oil demand.

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

Dalian's most-active soyoil contract gained 1.89 per cent, while its palm oil contract jumped 2.37 per cent. Soyoil prices on the Chicago Board of Trade were also trading up 1.14 per cent.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.