MARKET DEVELOPMENT
Palm Oil Set for Second Weekly Gain as Demand Outlook Improves
Palm Oil Set for Second Weekly Gain as Demand Outlook Improves
17/06/2013 (Bloomberg) - Palm oil headed for a second weekly advance on speculation that exports from Malaysia, the world’s second-largest producer, may rebound and trim stockpiles.
The contract for August delivery, the most active by volume, gained as much as 1 percent to 2,338 ringgit ($775) a metric ton on the Bursa Malaysia Derivatives and was at 2,331 ringgit at 11:55 a.m. in Kuala Lumpur. Futures are 0.5 percent higher this week.
Consumption usually rises during the Muslim fasting month of Ramadan, boosting purchases from the Middle East to South Asia including India, the world’s biggest buyer. Reserves in Malaysia fell 11 percent to 1.93 million tons in April, the lowest level since June and down from a record 2.63 million tons in December, the nation’s Palm Oil Board said May 10.
“Market players are positive on palm oil because they are anticipating demand to improve going ahead and inventories to draw down in May,” said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. Gains in soybean futures also boosted palm oil, he said.
Refined palm oil for September delivery gained 0.5 percent to 6,072 yuan ($989) a ton on the Dalian Commodity Exchange, while soybean oil increased 0.8 percent to 7,470 yuan. On the Chicago Board of Trade, soybeans for July delivery rose 0.5 percent to $14.3475 a bushel and soybean oil for the same month advanced 0.6 percent to 49.79 cents a pound.
The contract for August delivery, the most active by volume, gained as much as 1 percent to 2,338 ringgit ($775) a metric ton on the Bursa Malaysia Derivatives and was at 2,331 ringgit at 11:55 a.m. in Kuala Lumpur. Futures are 0.5 percent higher this week.
Consumption usually rises during the Muslim fasting month of Ramadan, boosting purchases from the Middle East to South Asia including India, the world’s biggest buyer. Reserves in Malaysia fell 11 percent to 1.93 million tons in April, the lowest level since June and down from a record 2.63 million tons in December, the nation’s Palm Oil Board said May 10.
“Market players are positive on palm oil because they are anticipating demand to improve going ahead and inventories to draw down in May,” said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. Gains in soybean futures also boosted palm oil, he said.
Refined palm oil for September delivery gained 0.5 percent to 6,072 yuan ($989) a ton on the Dalian Commodity Exchange, while soybean oil increased 0.8 percent to 7,470 yuan. On the Chicago Board of Trade, soybeans for July delivery rose 0.5 percent to $14.3475 a bushel and soybean oil for the same month advanced 0.6 percent to 49.79 cents a pound.