Palm oil climbed to the highest level in four weeks on speculation 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 0.8 percent to end at 2,428 ringgit ($792) a metric ton on the Malaysia Derivatives Exchange, the highest settlement level for the most-active contract since Nov. 26. Futures rose 5.9 percent last week and have trimmed this year’s losses to 22 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,” said Yew Hong Han, a broker at OSK Futures & Options in Kuala Lumpur. Investors are buying on speculation 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 were little changed at $14.2934 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March was little changed at 49.10 cents a pound.
Palm oil for May delivery dropped 0.2 percent to close at 6,842 yuan ($1,097) a ton on the Dalian Commodity Exchange. Soybean oil for May dropped 0.1 percent at close to 8,618 yuan a ton.