Malaysian palm oil futures soared more than 4% on Wednesday, marking their biggest one-day rise since July 2023, driven by strong gains in crude oil and Chicago soyoil prices. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange surged by 190 ringgit, or 4.74%, closing at 4,196 ringgit ($1,006.72) per metric ton.
The contract reached an intra-day high of 4,198 ringgit per metric ton, rising 4.79% earlier in the session, while posting a 5.03% increase over two consecutive trading sessions. The rise was attributed to climbing crude oil prices, as traders rushed to cover short positions amid escalating Middle Eastern tensions.
Anilkumar Bagani, research head at Sunvin Group, highlighted that the surge was further fueled by a weaker ringgit and bullish momentum in soyoil, while India’s lower vegetable oil imports in September will drive increased demand ahead of festival season. Brent crude futures jumped 2.91% to $75.70 per barrel, supporting palm oil as a more viable option for biodiesel feedstock.
The ringgit weakened 0.17% against the dollar, making palm oil more affordable for international buyers. Palm oil often tracks movements in other edible oils, as they compete for global market share.
