Palm oil gained for the first time in six days after West Texas Intermediate crude surged above $100 a barrel for the first time since September, boosting demand for vegetable oils as biofuel feedstock.
The contract for September delivery advanced as much as 0.8 percent to 2,357 ringgit ($740) a metric ton on the Bursa Malaysia Derivatives, before trading at 2,350 ringgit by 3:21 p.m. in Kuala Lumpur. Futures yesterday closed at the lowest price for the most active futures since May 21. Palm for local physical delivery in July was at 2,360 ringgit, data compiled by Bloomberg show.
Crude for delivery in August gained as much as 2.6 percent to $102.18 a barrel in New York on political turmoil in Egypt and as a report showed U.S. stockpiles shrank the most this year. A record 5.6 million tons of palm was used for fuel in 2012, according to Oil World, a Hamburg-based research company.
“Crude oil’s strength may encourage some biodiesel demand to come in,” Chandran Sinnasamy, head of trading at LT International Futures Sdn., said by phone from Kuala Lumpur. “The Ramadan demand is still there,” he said, referring to the Muslim fasting month.
Palm oil exports from Malaysia, the second-largest producer, increased 7 percent to 1.35 million tons in June from a month earlier, surveyor Intertek said on July 1. Consumption typically increases during Ramadan, which starts this month, as observers break day-long fasts with communal meals.
Soybean oil for December delivery rose 0.2 percent to 45.70 cents a pound, while soybeans for delivery in November climbed 0.8 percent to $12.5225 a bushel.
Refined palm oil for January delivery dropped 0.2 percent to close at 5,888 yuan ($960) a ton on the Dalian Commodity Exchange, while soybean oil for delivery in the same month declined 0.5 percent to end at 7,322 yuan.
