Palm oil rose as crude oil gained to above $82 a barrel, raising the appeal of the commodity as a feedstock for biodiesel and as Indonesia and Malaysia, the top producers, agreed to tackle environmental and labor issues.
May-delivery contract advanced as much as 1.5 percent to 2,709 ringgit ($810) a metric ton on the Malaysia Derivatives Exchange, the highest price since Jan. 6.
Crude oil for April delivery added 0.6 percent to $81.95 a barrel amid speculation that improving demand and supply restrictions by the Organization of the Petroleum Exporting Countries will help slow growth in stockpiles. It traded as high as $82.04 a barrel earlier on Monday.
â€śCrude increased sharply in the last two days,â€ť supporting palm-oil prices, said Merlissa Paramitha Trisno, an analyst with PT Mandiri Sekurita.
â€śA move by Indonesia and Malaysia to team up to counter the negative campaign against palm oil also added some support to the market.â€ť
Indonesia and Malaysia agreed on Thursday jointly to tackle environmental and labor issues that threaten the development of the industry, the Jakarta Globe reported on Monday, citing Agriculture Minister Suswono.
Unilever said on Dec. 11 that it had suspended purchases from the Sinar Mas Group, Indonesiaâ€™s biggest palm-oil producer, until the company can prove that its plantations are not contributing to deforestation. Unilever also blacklisted PT Duta Palma for a similar reason, The Independent reported on Feb. 22.