Palm Oil Heads for First Weekly Advance in Four as Exports Gain
Palm oil climbed for a fourth day, poised for the biggest weekly gain since February, as a weaker ringgit increased prospects for exports from Malaysia, the world’s second-largest producer.
The contract for delivery in October rose as much as 0.6 percent to 2,273 ringgit ($698) on the Bursa Malaysia Derivatives and ended the morning session at 2,271 ringgit. Futures are set for a 4 percent gain this week, rebounding from the lowest price since October 2009 reached on July 26.
Palm oil shipments from Malaysia gained 5.3 percent to 1.39 million tons in July from a month earlier, according to SGS (Malaysia) Sdn. This compares with a 24 percent drop in the first half of the month and a 6 percent decline in the first 25 days of July, SGS estimates show. The ringgit headed for its biggest weekly loss in more than a month after Fitch Ratings lowered Malaysia’s credit outlook to negative.
“The weaker ringgit coupled with a stronger exports data toward the last few days of the month boosted sentiment and suggested that lower prices have been successful in attracting demand,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd., by phone from Kuala Lumpur. “The trend is cautious. Production in August may drop a bit as workers may be taking some time off for the holidays, but come September there are concerns that production may pick up again.”
Indonesian markets are closed the whole of next week, while Malaysia will be shut on Aug. 8 and 9 for Eid holidays.
Soybean oil for delivery in December advanced 0.6 percent to 43.16 cents a pound on the Chicago Board of Trade. Soybeans for November gained 0.5 percent to $11.985 a bushel.
To contact the reporter on this story: Swansy Afonso in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com