(Nov 1): Palm oil rallied for a third day to its highest level in more than two years, on strong demand amid concerns over tightening supply.
Shipments in October from palm oil’s second largest producer Malaysia climbed 11% from the month before, on stronger exports to India, China and the European Union (EU), according to cargo surveyor Intertek Testing Services.
The world’s most widely used cooking oil also tracked gains in crude oil, which boosted palm’s appeal as a biofuel feedstock. Palm oil is set to get an additional demand boost from Indonesia early next year, when the nation plans to increase the volume of tropical oil used in its biofuel mix.
The strong demand, coupled with supply woes in part due to ageing trees, has pushed palm oil up more than 30% so far this year.
With increased seasonal consumption, constrained supply and more biodiesel support, the rally could extend through the first quarter of 2025, said Abdul Hameed, director of sales at Manzoor Trading Co in Lahore.
| Drivers |
|---|
| Oil rallies on report Iran is planning Israel attack via proxiesThailand halts palm oil exports, holds retail prices: PrachachatMalaysia’s October palm oil exports +11.45% m/m (month-on-month): IntertekRinggit steady; stocks down: Inside Malaysia |
| Prices |
|---|
| Palm for January delivery on Bursa Malaysia Derivatives rose as much as 2.9% to RM4,833/tonne, before trading at RM4,830/tonne as of midday breakSoybean oil for December in Chicago rises 1.7% to 45.9 c/lbRefined palm oil for January on Dalian Commodity Exchange +1.7% to 9,636 yuan/tonne; Soybean oil for January +1.5% to 8,586 yuan/tonneSoybean oil’s discount to palm ~US$89 (RM390)/tonne: data compiled by BloombergPalm’s premium over gasoil ~US$420/tonne versus an average of ~US$93 in past year: data compiled by Bloomberg |