Palm Oil Gains as China Data Boosts Prospects for Higher Demand
Palm oil climbed the most in more than a week after improved manufacturing data from China buoyed speculation that the economy is picking up in the second-largest buyer, lifting commodity prices.
The contract for January delivery advanced 1.6 percent to 2,537 ringgit ($831) a metric ton on the Malaysia Derivatives Exchange, the biggest gain at close since Oct. 22. Most-active prices dropped in October for a second straight month.
China’s Purchasing Managers’ Index rose to 50.2 in October from 49.8 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said, matching the median forecast in a Bloomberg survey of 30 economists. A reading above 50 indicates expansion. Crude oil, copper and grain prices advanced.
“China has shown some improvement in growth finally, and this is supportive for commodities,” Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore. “Prices have fallen in the last few days and this has enticed some bargain-hunting activities at lower levels.”
Palm oil consumption may grow 7 percent to 8 percent per year because of a massive shift toward diet richer in meat and fat by consumers in countries like China and India, Sunny Verghese, chief executive officer of Olam International Ltd. said at a conference in Hong Kong today.
Soybean oil for December delivery climbed as much as 1.5 percent to 50.91 cents a pound on the Chicago Board of Trade, and was at 50.55 cents. Soybeans for January delivery gained as much as 1.3 percent to $15.685 a bushel, and were at $15.635. Palm and soybean oils are substitutes in food and fuel uses.
Palm oil for May delivery climbed 0.4 percent to close at 7,074 yuan ($1,134) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month rose 0.5 percent to end at 9,118 yuan a ton.
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