(Updates with closing prices)
By Carman Chew
SINGAPORE, April 3 (Reuters) - Malaysian palm oil
futures finished more than 3% higher on Monday, in the market's
biggest rise in two months, as a rally in crude oil lifted
prices after Saudi Arabia and other OPEC+ producers announced a
surprise cut in their output target.
The benchmark palm oil contract for June delivery
on the Bursa Malaysia Derivatives Exchange climbed 124 ringgit,
or 3.3%, to 3,885 ringgit ($879.56) a tonne, peaking at 3,919
ringgit, or 4.2% higher, earlier in the session.
"A buying frenzy, fuelled by crude oil, sent palm futures
up," said Sathia Varqa, co-founder of Singapore-based Palm Oil
Analytics.
"As fossil fuel prices rise, the demand and use of
palm-biodiesel become more attractive."
Malaysia said on Sunday it had signed a memorandum of
understanding with a China government-backed trade association
to enhance palm oil trading and cooperation.
Dalian's most-active soyoil contract rose 1.4%,
while its palm oil contract strengthened 1.7%. Soyoil
prices on the Chicago Board of Trade was up 2.0%.
Palm oil is affected by price movements in related oils as
they compete for a share in the global vegetable oils market.
Oil prices surged on Monday, their biggest rise in nearly a
year, after a surprise announcement by OPEC+ to cut more
production jolted markets. Higher oil prices make palm oil a more attractive option as
biodiesel feedstock.
($1 = 4.4170 ringgit)
(Reporting by Carman Chew; Editing by Rashmi Aich)
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