Palm oil climbed for a fourth day to the highest level in two weeks as rising exports from Malaysia, the second-largest producer, signaled a surge in demand ahead of the Muslim fasting month of Ramadan.
The August-delivery contract advanced 1.1 percent to 3,178 ringgit ($1,007) a metric ton, the highest closing price since May 15. Futures are heading for a 8.4 percent decline in May, the biggest monthly drop since June last year.
Exports from Malaysia rose 10.5 percent to 1.15 million tons in the first 25 days of this month from the same period a month earlier, surveyor Intertek said May 25. Consumption of food staples and cooking oils climbs during the fasting month of Ramadan, which starts in July this year, as followers break daylong fasts with communal meals.
“Prices have moved up as the export figures have come surprisingly higher,” said Gnanasekar Thiagarajan, a Mumbai- based director at Commtrendz Risk Management Services Pvt. “We are seeing bargain hunting at these levels after the way prices declined earlier.”
Gains in futures may be capped by any negative news about the European debt crisis, he said.
Crude palm-oil imports by India, the largest buyer, are poised to increase after the nation raises the tax on refined cooking oils, said Atul Chaturvedi, chief executive officer of Adani Wilmar Ltd., India’s second-biggest importer.
Refined palm-oil and soybean oil will become more expensive once the government links the import tax to market prices, he said. The nation may raise the benchmark import price, unchanged since 2006, to protect refiners, a government official said yesterday. He gave no time frame. Refined oils are taxed at 7.5 percent, while there’s no tax on crude oils.
Soybeans for July delivery advanced 0.9 percent to $13.9375 a bushel on the Chicago Board of Trade. Soybean oil for the same month rose 0.7 percent to 50.47 cents a pound. Palm oil and soybean oil are both used in foods and fuels.
To contact the reporter on this story: Swansy Afonso in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com