Palm closes 3pc higher, hits highest level in almost two and a half years

KUALA LUMPUR, Nov 1 (Reuters): Malaysian palm oil futures jumped more than 3 per cent on Friday, reaching the highest in almost two and a half years in response to stronger soyoil and crude oil prices, along with positive domestic export estimates.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 169 ringgit, or 3.6 per cent, to 4,865 ringgit ($1,112.00) a metric ton, its highest close since June 30, 2022.

The contract logged a 7.25 per cent gain this week, its second consecutive weekly increase and its strongest performance since mid-June 2023.

The palm market is reacting to stronger soyoil and crude oil prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

"The recent strong export pace is also keeping the positive sentiment in the palm oil market."

Cargo surveyors estimate exports of Malaysian palm oil products rose between 11.5 per cent and 13.7 per cent in October compared with the same period a month ago.

Dalian's most-active soyoil contract 1 rose 1.75 per cent, while its palm oil contract added 2.46 per cent. Soyoil prices on the Chicago Board of Trade were up 2.46 per cent.

Palm oil tracks price movements of rival edible oils as it competes for a share in the global vegetable oils market.

Oil prices extended gains on Friday, climbing more than $1 a barrel to pare weekly losses, after reports oil producer Iran was preparing a retaliatory strike on Israel from Iraq in the coming days.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit MYR=, palm's currency of trade, remained unchanged against the US dollar.

Indonesia raised its crude palm oil reference price for November to $961.97 per metric ton from $893.64 in October, a trade ministry official told Reuters. The new price will put the export tax for November at $124 per ton.