Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Palm Oil Gains to One-Week High as Drop in Prices Spurs Demand

Don't Miss Out —
Follow us on:

March 7 (Bloomberg) -- Palm oil climbed to the highest level in more than a week on speculation that the biggest weekly decline since November may spur demand and as reserves in Malaysia may drop on falling output.

The contract for May delivery gained 1.4 percent to 2,433 ringgit ($784) a metric ton on the Malaysia Derivatives Exchange, the highest close for a most-active contract since Feb. 25. Futures fell 6.6 percent last week, the most since the five days ended Nov. 9, and lost 26 percent in the past year.

Futures will trade from 2,300 ringgit to 2,500 ringgit through April as stockpiles in Malaysia drop, Dorab Mistry, director at Godrej International Ltd., told a conference yesterday. While the inventories may fall to about 2.1 million tons, they may rebound to close to 3 million tons by the end of this year, said Mistry. Reserves reached a record 2.63 million tons in December.

“Demand is coming in around these levels,” Vijay Mehta, a director at Commodity Links Pte, said by phone from Singapore. Malaysia’s output may drop in March from February, reducing stockpiles, he said. Futures will trade between 2,350 ringgit and 2,600 ringgit in the next two months, he said.

Inventories, which were at 2.58 million tons in January, may have decreased to 2.44 million tons last month, according to a Bloomberg survey published this week. Official data from the Malaysian Palm Oil Board are due for release on March 11.

Investors may also be reversing bets on further declines before the release of the MPOB data, said Ivy Ng, an analyst at CIMB Group Holdings Bhd.

Soybean oil for May delivery was little changed at 50.29 cents a pound on the Chicago Board of Trade. Soybeans for May delivery gained 0.2 percent to $14.6925 a bushel.

Refined palm oil for delivery in September lost 0.6 percent to 6,570 yuan ($1,056) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month lost 1.1 percent to 8,258 yuan a ton.

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.