03/04/2023 (Nasdaq), Singapore - Malaysian palm oil futures rose nearly 3% on Monday and touched a two-week high, as a rally in crude oil lifted prices.

The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange gained 97 ringgit, or 2.6%, to 3,858 ringgit ($872.85) a tonne by the midday break, recovering from a brief fall late last week.

"A buying frenzy, fuelled by crude oil, sent palm futures up," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

"As fossil fuel prices rise, the demand and use of palm-biodiesel become more attractive," he added.

Malaysia said on Sunday it has signed a memorandum of understanding with a China government-backed trade association to enhance palm oil trading and cooperation.

Dalian's most-active soyoil contract DBYcv1 advanced 1.7%, while its palm oil contract DCPcv1 gained 1.9%. Soyoil prices on the Chicago Board of Trade BOcv1 was up 1.6%.

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

Oil prices surged on Monday, jolted by a surprise announcement by OPEC+ to cut production further in what top producer Saudi Arabia called a precautionary measure to support market stability. O/R

Palm oil often takes cues from energy markets, with the growing use of the vegetable oil in making biofuels helping it compete with petroleum products.

($1 = 4.4200 ringgit)

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-oil-hits-to-2-week-high-tracks-crude-oil-rally