Palm Oil Advances a Second Week as Exports From Malaysia ClimbRanjeetha Pakiam
Palm oil gained for a second week on speculation that rising exports from Malaysia may curb a build-up in stockpiles in the world’s second-largest producer.
The contract for delivery in January rose 0.1 percent to close at 2,401 ringgit ($762) a metric ton on the Bursa Malaysia Derivatives, near a five-week high of 2,409 ringgit on Oct. 16. Futures climbed 0.9 percent this week. Palm for physical delivery in November was at 2,400 ringgit, data compiled by Bloomberg show.
Shipments gained 12 percent to 799,853 tons in the first half of this month, SGS (Malaysia) Sdn. said on Oct. 16. Reserves dropped 32 percent to 1.78 million tons last month from a record 2.63 million tons in December, data from the Malaysian Palm Oil Board shows.
The rise in prices this week to the highest in more than five weeks was helped by robust exports and receding expectations of rising output, Gnanasekar Thiagarajan, a director at Mumbai-based Commtrendz Risk Management Services Pvt, wrote in a report today.
“It does look increasingly likely that the inventory will not get anywhere near the 2.63 million tons, and will probably peak at about 2 million tons to 2.1 million tons,” said Alvin Tai, an analyst at RHB Investment Bank Bhd. This is “something the market can stomach very well.”
Soybeans for delivery in November gained 0.4 percent to $12.98 a bushel on the Chicago Board of Trade, while soybean oil for December climbed 0.8 percent to 41.45 cents a pound.
Refined palm oil for May delivery advanced 0.8 percent to close at 6,020 yuan ($988) a ton on the Dalian Commodity Exchange and soybean oil for delivery in the same month ended little changed at 7,168 yuan a ton.