Palm Oil Advances to One-Week High as China Seen Raising Imports
Palm oil climbed to the highest level in more than a week on speculation that China, the biggest cooking oil user, will boost imports and after soybeans rallied yesterday on signs of increasing demand for U.S. supplies.
The contract for January delivery climbed 0.2 percent to 2,501 ringgit ($819) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur, the highest level at close since Oct. 11. Futures, which were little changed this week, have lost 21 percent this year.
Palm oil imports by China, the largest buyer after India, may be about 5.7 million tons in 2012 as a price decline spurs purchases, according to the median of estimates from four analysts and one trader compiled by Bloomberg. A survey in August predicted imports of 5.5 million tons compared with 5.9 million tons last year. Soybeans rose the most in five weeks yesterday and are set for the first weekly advance in five.
Palm oil traded higher because of strong overnight soybean prices, Ryan Long, a vice president of futures and options at OSK Investment Bank Bhd., said by phone from Kuala Lumpur. “China may restock a bit but they will not buy in a big way. We do expect Malaysia’s exports to be higher than the previous month as India and China are buying.”
Indonesia, the largest producer, will probably reduce a tax on exports in November to 10.5 percent, the lowest level in two years, from 13.5 percent this month, said Susanto, head of marketing at the Indonesian Palm Oil Association. Base price may be reduced to $785 a ton from $927, he said.
Soybean oil for December delivery declined 0.2 percent to 52.20 cents a pound on the Chicago Board of Trade today after surging 2.5 percent yesterday. Soybeans for November delivery was little changed at $15.475 a bushel. Futures jumped 2.4 percent yesterday, the most since Sept. 12. Palm oil and soybean oils are substitutes in food and fuel uses.
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