(Corrects contract move in second paragraph.)
Palm oil gained after the steepest drop in 19 months yesterday boosted demand as countries sought to build stockpiles amid dwindling global oilseed supplies.
The December-delivery contract advanced as much as 1 percent to 2,889 ringgit ($946) a metric ton on the Malaysia Derivatives Exchange and was at 2,877 ringgit at the midday break. Futures closed 4.2 percent lower yesterday, the steepest drop for the most-active contract since Feb. 23, 2011.
Palm oil consumption may increase through the next quarter as world supplies are ample while production of competing seed oils declines, Oil World said. India, China and the European Union may boost imports of palm oil as world output increases 3.1 million tons or 3.2 million tons in the year beginning Oct. 1, the Hamburg-based researcher said in a report yesterday.
“Demand is coming in because of the current low prices,” Ker Chung Yang, an analyst at Phillip Futures Pte., said by phone from Singapore. “It’s attractive to stockpile” for countries like India and Pakistan, he said.
Palm oil has traded at “extremely wide price discounts” to other vegetable oils because stockpiles have increased in parts of Southeast Asia, Oil World said. Palm oil’s discount to soybean oil was at $290.84 a ton today, compared with a five- year average of $167.60, data compiled by Bloomberg show.
Malaysian exports rose 12.2 percent to 680,112 tons in the first 15 days of September from the same period in August, surveyor Intertek said Sept. 15. Shipments gained 12.3 percent to 660,955 tons, said Societe Generale de Surveillance.
November-delivery soybeans advanced 1.5 percent to $16.6475 a bushel on the Chicago Board of Trade. Soybean oil for December climbed 0.7 percent to 55.69 cents a pound.
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