Palm oil surges to two-year high on firm exports and crude rally

Monday 04 Nov 2024

(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 proxies Thailand halts palm oil exports, holds retail prices: Prachachat Malaysia’s October palm oil exports +11.45% m/m (month-on-month): Intertek Ringgit 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 break Soybean oil for December in Chicago rises 1.7% to 45.9 c/lb Refined 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/tonne Soybean oil’s discount to palm ~US$89 (RM390)/tonne: data compiled by Bloomberg Palm’s premium over gasoil ~US$420/tonne versus an average of ~US$93 in past year: data compiled by Bloomberg

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 break
Soybean oil for December in Chicago rises 1.7% to 45.9 c/lb
Refined 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/tonne
Soybean oil’s discount to palm ~US$89 (RM390)/tonne: data compiled by Bloomberg
Palm’s premium over gasoil ~US$420/tonne versus an average of ~US$93 in past year: data compiled by Bloomberg

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