Palm oil advanced the most in more than a week on concern that rains in the main growing areas of Malaysia, the second-largest grower, may hamper harvests.
The February-delivery contract climbed 1.7 percent to 3,052 ringgit ($959) a metric ton on the Malaysia Derivatives Exchange, the most since Dec. 5. Futures, which have lost 19 percent this year, are heading for the first annual decline in three years.
Scattered and heavy rains are forecast in many parts of the country, causing strong winds and flash floods, the Malaysian Meteorological Department said today on its website.
“Prices have moved up on rains in the plantation areas of Malaysia,” Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt., said by phone from Mumbai. “Heavy rains may affect harvesting and lead to tighter supplies even as production enters the lean season.”
Output declined 14.8 percent to 1.6 million tons in November from a month earlier, the Malaysian Palm Oil Board said yesterday. Palm oil inventories declined 1.5 percent to 2.1 million tons, while exports shrank 9.9 percent to 1.7 million tons, it said.
“Everybody is buying at dips below 3,000 ringgit on further price rise forecasts,” Thiagarajan said.
Crude palm oil imports by India, the largest buyer, jumped to 611,193 tons in November from 476,611 tons a year earlier, the Solvent Extractors’ Association of India today.
January-delivery soybeans declined as much as 0.6 percent to $11.115 a bushel on the Chicago Board of Trade before trading at $11.17 at 4:44 p.m. in Mumbai. Soybean oil for March delivery climbed as much as 0.6 percent to 49.94 cents a pound.
Palm oil for delivery in May declined 0.4 percent to close at 7,792 yuan ($1,225) per ton on the Dalian Commodity Exchange and soybean oil for September delivery climbed 0.2 percent to end at 8,746 yuan.