Palm Climbs to One-Week High as Malaysian Exports Signal DemandRanjeetha Pakiam
Palm oil advanced to the highest level in more than a week as shipments increased from Malaysia, the top producer after Indonesia, signaling a rebound in demand.
The contract for delivery in October advanced 1 percent to 2,259 ringgit ($696) a metric ton, the highest price at close since July 22 on the Bursa Malaysia Derivatives. Futures dropped 4.6 percent last month, the most since February, after reaching the lowest level since October 2009 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.
“There is short-covering due to these good exports as this is above market expectations,” said Chandran Sinnasamy, head of trading at LT International Futures Sdn., said by phone from Kuala Lumpur. Short-covering refers to investors reversing bets on declining prices.
Expectations of lower production in the first half of August due to the Eid festival holidays may support prices, said Chandran. Indonesian markets are closed the whole of next week, while Malaysia will be closed on Aug. 8 and 9.
Soybean oil for delivery in December advanced 0.5 percent to 42.90 cents a pound on the Chicago Board of Trade. Soybeans for November were little changed at $12.055 a bushel, after touching $11.9425 yesterday, the lowest intraday price for a most-active contract since Jan. 31, 2012.
Refined palm oil for January delivery fell 0.2 percent to close at 5,412 yuan ($883) a ton on the Dalian Commodity Exchange. Soybean oil lost 0.3 percent to end at 7,012 yuan.