Palm oil rises on bargain buying, stronger ringgit
KUALA LUMPUR: Malaysian palm oil futures rose on Tuesday after six consecutive sessions of losses, supported by bargain buying, but a stronger ringgit and continued economic uncertainty limited the gains.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange added 57 ringgit, or 1.46%, to 3,967 ringgit ($904.06) a metric ton at the close.
Crude palm oil futures were higher due to bargain buying as prices are currently at a discount compared to soyoil, said Anilkumar Bagani, commodity research head at Mumbai-based brokerage Sunvin Group.
'Recovery in energy prices and soyoil along with improved demand from India has helped palm oil prices gain as well,' he said.
However, Bagani said that a stronger ringgit and the ongoing global economic uncertainty continued to dampen the gains.
Dalian's most-active soyoil contract rose 1.32%, while its palm oil contract added 0.67%. Soyoil prices on the Chicago Board of Trade (CBOT) were up 1.03%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices rose as investors took advantage of the previous day's losses to cover short positions, though concerns persist over economic headwinds from tariffs and US monetary policy that could dampen fuel demand.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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