Palm Oil Climbs as Worst Losing Streak Since 2006 Spurs DemandSwansy Afonso
Palm oil climbed for the first time in nine days on speculation that the worst losing streak since 2006 may stoke demand, cutting reserves in Indonesia and Malaysia, the world’s biggest producers.
The contract for May delivery climbed 1.8 percent to 2,411 ringgit ($776) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures tumbled 6.6 percent last week.
Palm, used in food, biofuels and cosmetics, has slumped 26 percent in the past year as stockpiles surged to records and demand for the tropical oil fell due to a global economic slowdown. Inventories in Indonesia may drop 8 percent to 2.3 million tons this year as a significant increase in demand outstrips record supplies, according to Derom Bangun, chairman of the nation’s palm board.
“The decline in prices will attract some buying,” said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai. “You will see more of palm oil being imported in India in the near future because there is a shortage of soybean oil. Across the markets, be it Chinese or U.S., edible oils have been positive today and this is also reflecting on palm.”
Cooking oil imports by India may reach 10.7 million tons this year from 9.98 million tons in 2011-12 as demand gains 5 percent on population and per-capita consumption growth, Sandeep Bajoria, chief executive officer at Mumbai-based brokerage Sunvin Group, said.
Soybeans for May delivery climbed 0.4 percent to $14.485 a bushel on the Chicago Board of Trade. Soybean oil for May was little changed at 49.60 cents a pound.
Refined palm oil for delivery in September gained 0.5 percent to close at 6,644 yuan ($1,067) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month climbed 0.9 percent to end at 8,326 yuan a ton.