Palm oil climbed to the highest level in almost four weeks on speculation that demand will gain in China, the world’s biggest cooking oil buyer, and reduce record inventories in Malaysia, the top producer after Indonesia.
The contract for March delivery gained as much as 1.2 percent to 2,437 ringgit ($795) a metric ton on the Malaysia Derivatives Exchange, the highest price for the most-active contract since Nov. 27, before closing the morning session at 2,425 ringgit. Futures rose 5.9 percent last week and have trimmed this year’s losses to 24 percent.
Palm oil imports increased in November to 654,232 tons from 638,217 tons in October and 629,222 tons in November 2011, data released by China’s customs agency showed Dec. 21. Stockpiles in Malaysia rose to an all-time high of 2.56 million tons last month, the nation’s palm oil board said Dec. 10.
“China demand is increasing before the New Year,” Yew Hong Han, a broker at OSK Futures & Options, said by phone today. Investors are buying on speculation that record inventories, which drove prices to a three-year low on Dec. 13, will decline in Malaysia after the country said it will allow exports at zero duty in January, he said.
The average price for calculating tax on shipments was set at 2,147.81 ringgit a ton, the customs department said in a notification on Dec. 17. That’s below the minimum threshold of 2,250 ringgit a ton for tax to be applied, it said.
Soybeans for March delivery gained 0.4 percent to $14.345 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March advanced 0.5 percent to 49.34 cents a pound.
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