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VEGOILS-Palm hits five-month high up on India need, supply concerns

Malaysian palm oil futures struck a fivemonth high, surging more than 2% on Thursday's close, driven by high demand from India and stresses over production supply in major palmproducing countries.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 109 ringgit, or 2.7%, to 4,152 ringgit ($ 1,002.90) a metric lot at closing, the highest close considering that April 15.

The agreement has increased 11% over the last 7 sessions.

Robust demand from India, driven by domestic consumption and restocking prior to the festive season, is keeping palm oil costs high alongside concerns about the stagnant to declining palm oil production in Malaysia and Indonesia due to current weather, Marcello Cultrera, a. grains, oilseeds and softs broker for SSY Global, stated.

As the northeast monsoon season approaches and the production cycle slows, there are. growing stress over reaching a production peak in October.

On Wednesday, the ASEAN specialised meteorological centre reported that wetter conditions. are expected for the majority of the equatorial region between September 30 and October 13.

Indonesia and Malaysia, the world's biggest palm oil producers, represent around 85% of. the world's exports.

Dalian's most-active soyoil contract rose 1.19%, while its palm oil agreement. added 1.79%. Soyoil prices on the Chicago Board of Trade were up 0.93%.

There has actually been weaker need for biofuels in particular regions due to falling petroleum. rates. As soybean oil is utilized in biofuel production, a decrease in energy rates can minimize. need for soybean oil as a feedstock, Cultrera said.

Palm oil tracks rate movements in rival edible oils, as they compete for a share of the. international veggie oils market.

The ringgit, palm's currency of trade, damaged 0.31% versus the U.S. dollar, making. the product less expensive for buyers holding foreign currencies.

Oil prices dropped on Thursday, reversing earlier gains, on news Saudi Arabia, the world's. biggest crude exporter, will quit on its cost target in preparation for raising output.

Weaker petroleum futures make palm a less attractive option for biodiesel feedstock. ($ 1 = 4.1400 ringgit)

(source: Reuters)