Palm oil climbs to highest since April 9
Tuesday, 27 April 2010
KUALA LUMPUR, April 26 (Bloomberg): Palm oil advanced as crude oil rose for a third day, boosting the appeal of vegetable oils used in biofuels, and after Godrej International Ltd. director Dorab Mistry said the tropical oil may advance in the second half.
Palm oil for July delivery gained as much as 1.1 per cent to 2,568 ringgit ($809) a tonnes, the highest price for the most-active contract since April 9, and traded at 2,556 ringgit on the Malaysia Derivatives Exchange by the 12:30 p.m. break.
"Crude palm oil looks to be tagging the rise in crude oil today," said Arhnue Tan, a senior analyst at ECM Libra Capital Sdn. in Kuala Lumpur.
Palm oil has tracked crude oil's weekly movements for the past 11 weeks. Crude oil in New York for June delivery rose 0.2 per cent to $85.31 a barrel at 2:28 p.m. Singapore time amid optimism that the global economic recovery will boost demand.
The gains came even as data showed palm oil exports from Malaysia, the second-biggest producer, tumbled 15 per cent in the first 25 days of April compared with the same period in March, according to independent market surveyor Intertek.
A total of 947,304 tonnes of shipments were tracked from April 1 to 25, down from 1.1 million tonnes in the same period in March, Intertek said in an e-mailed statement in Kuala Lumpur. Shipments to the two largest consumers dropped, with exports to China down 12 per cent to 285,707 tonnes, and to India and the subcontinent down 53 per cent to 124,700 tonnes.
"It's been expected to be weak for this month, especially from those two regions," Tan said. "For China, numbers should normalise eventually as the current decline is because of a stock buildup, which was reported by China last week."
China's palm oil inventories are at the highest in 1 ½ years, with stockpiles at ports estimated at 546,000 tonnes, the China National Grain & Oils Information Center said on April 15.
"As for India, we believe the decline could be due to competition with soy oil as the crude palm oil-soy oil discount has narrowed considerably," Tan said.
Palm oil for July delivery gained as much as 1.1 per cent to 2,568 ringgit ($809) a tonnes, the highest price for the most-active contract since April 9, and traded at 2,556 ringgit on the Malaysia Derivatives Exchange by the 12:30 p.m. break.
"Crude palm oil looks to be tagging the rise in crude oil today," said Arhnue Tan, a senior analyst at ECM Libra Capital Sdn. in Kuala Lumpur.
Palm oil has tracked crude oil's weekly movements for the past 11 weeks. Crude oil in New York for June delivery rose 0.2 per cent to $85.31 a barrel at 2:28 p.m. Singapore time amid optimism that the global economic recovery will boost demand.
The gains came even as data showed palm oil exports from Malaysia, the second-biggest producer, tumbled 15 per cent in the first 25 days of April compared with the same period in March, according to independent market surveyor Intertek.
A total of 947,304 tonnes of shipments were tracked from April 1 to 25, down from 1.1 million tonnes in the same period in March, Intertek said in an e-mailed statement in Kuala Lumpur. Shipments to the two largest consumers dropped, with exports to China down 12 per cent to 285,707 tonnes, and to India and the subcontinent down 53 per cent to 124,700 tonnes.
"It's been expected to be weak for this month, especially from those two regions," Tan said. "For China, numbers should normalise eventually as the current decline is because of a stock buildup, which was reported by China last week."
China's palm oil inventories are at the highest in 1 ½ years, with stockpiles at ports estimated at 546,000 tonnes, the China National Grain & Oils Information Center said on April 15.
"As for India, we believe the decline could be due to competition with soy oil as the crude palm oil-soy oil discount has narrowed considerably," Tan said.