Palm Oil Futures Advance in Malaysia, Tracking Gains in Crude

July 14 (Bloomberg) -- Palm oil futures gained in Malaysia as crude oil futures gained, increasing the appeal of biofuels produced from the tropical oil.

August-delivery crude oil gained as much as 0.9 percent to $60.20 a barrel amid signs fuel demand will climb as economic growth in China accelerates. Palm oil tends to follow changes in crude oil prices, as vegetable oils can be used for biofuels.

“When people see that they can make money on it, they will jump on it,” Ben Santoso, an analyst at DBS Vickers Securities (Singapore), said, referring to biodiesel production.

Palm oil for September delivery rose as much as 2.7 percent to 2,044 ringgit ($570) a metric ton on the Malaysia Derivatives Exchange. Futures traded at 2,034 a ton at 11:48 a.m. local time.

Suppliers of biodiesel to Germany make a gross profit of about $93 a metric ton, when processing palm oil purchased at 2,035 ringgit a ton, assuming crude oil trades at $60 a barrel, Santoso said.