Palm oil advanced for the first time in four days on speculation that demand for the world’s most consumed vegetable oil may increase ahead of the Muslim fasting month of Ramadan.
The contract for July delivery, the most active by open interest, gained 1.1 percent to end the morning session at 2,322 ringgit ($772) a metric ton on the Bursa Malaysia Derivatives. The August-delivery contract, the largest by volume, rose 0.9 percent to 2,317 ringgit.
“With the festival season ahead, specially Ramadan, stockists will slowly start buying now at these levels,” Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt., said by phone from Mumbai. “Exports may pick up toward the end of the month, easing inventories. A weaker ringgit is also supporting prices.”
Consumption usually rises during Ramadan, boosting purchases from the Middle East to South Asia including India, the world’s biggest buyer. During the festival, communal meals help to raise overall consumption. 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.
Refined palm oil for September delivery gained 1.6 percent to 6,048 yuan ($984) a ton on the Dalian Commodity Exchange, while soybean oil increased 1 percent to 7,404 yuan. On the Chicago Board of Trade, soybeans for July delivery rose 0.2 percent to $14.1575 a bushel and soybean oil for same month advanced 0.4 percent to 49.53 cents a pound.
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