(For physical price assessments, see MPOI1.)
Sept. 5 (Bloomberg) -- Palm oil advanced as strengthening crude oil prices increased the appeal of vegetable oils as biofuel feedstock.
Palm for November delivery rose 0.5 percent to close at 2,410 ringgit ($729) a metric ton on the Bursa Malaysia Derivatives. Palm oil for physical delivery in September was at 2,415 ringgit, data compiled by Bloomberg show.
West Texas Intermediate crude for October delivery gained as much as 0.8 percent to $108.04 a barrel in electronic trading on the New York Mercantile Exchange as a U.S. Senate committee approved military strikes on Syria, heightening the threat of a wider conflict in the Middle East. Use of palm oil for fuel is expected to advance 11 percent to 6.34 million tons in 2013, according to Hamburg-based research company Oil World.
“Because of the way energy prices have gone up, there’s a sudden increase in demand for biodiesel as well,” Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt., said by phone from Mumbai. “Production is expected to rise but a lot of demand could also resurface. Any dips are finding buying opportunities from destinations.”
India, the biggest importer, may buy when prices drop and start to restock before the Diwali festival which falls in November this year, said Gnanasekar.
While palm is harvested all year round, output is typically highest from July to October each year. Malaysia is the largest producer after Indonesia.
Refined palm oil for January delivery declined 0.3 percent to close at 5,570 yuan ($910) a ton on the Dalian Commodity Exchange. Soybean oil ended unchanged at 7,188 yuan a ton.
Soybeans for November delivery declined 0.7 percent to $13.4325 a bushel on the Chicago Board of Trade. Soybean oil for delivery in December fell 0.2 percent to 43.83 cents a pound.
--Editor: Thomas Kutty Abraham