Palm oil climbed for a third day on speculation that demand may increase ahead of the Muslim fasting month of Ramadan and as Greek opinion polls showed voters backing parties that support the European Union’s bailout.
The August-delivery contract advanced 0.5 percent to close at 3,144 ringgit ($1,001) a metric ton on the Malaysia Derivatives Exchange, the highest price for the most-active contract since May 15. Futures are heading for a 9.4 percent decline this month.
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. Shipments advanced 7.6 percent to 1.11 million tons, Societe Generale de Surveillance said. 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.
“Ramadan is coming soon, so Middle East countries may start to buy ahead to stock up,” Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., said by phone today. “There’s some good news that in Greece the pro-bailout group is ahead in the poll survey,” said Lim.
New Democracy, which supports the plan negotiated with international lenders, was placed first in all six opinion polls published on May 26 as campaigning continued for next month’s general election, easing concern that Greece will exit the currency bloc.
“On the supply side, there’s news that El Nino may come in later this year,” said Lim.
El Nino conditions, which can parch Asia and bring cooler weather to the U.S., may develop this year as the Pacific Ocean warms, Australia’s Bureau of Meteorology said May 8. Palm oil yields in Indonesia and Malaysia, the largest producers, have been affected by El Nino in the past, resulting in lower output.
Palm oil for September delivery gained 1 percent to close at 8,022 yuan ($1,266) a ton on the Dalian Commodity Exchange. Soybean oil for January advanced 1.3 percent to 9,338 yuan. U.S. financial markets are closed for the Memorial Day holiday.