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| Palm oil jumps to 6-month high as crude oil ends fall |
| Bloomberg / Dec 17, 2009, 00:47 IST |
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Palm oil jumped to the highest level in more than six months after crude oil rose for the first time in 10 days, boosting prospects of the vegetable oil being used as a biofuel.
Oil snapped the longest decline since 2001 on Tuesday as the Federal Reserve said that output at plants, mines and utilities rose 0.8 per cent in November, the fourth increase in five months.
February delivery futures advanced 2.2 per cent to 2,580 ringgit ($754) a tonne on the Malaysia Derivatives Exchange at the 6 pm close, the highest level since June 2. The most-active contract climbed 2.6 per cent to 2,590 ringgit in intraday trading. Prices have gained 52 per cent this year.
“Gains in crude oil is positive for palm oil and most of the fundamental factors are supportive for prices,” Donny Khor, senior vice president for futures & options at OSK Investment Bank, said by telephone from Kuala Lumpur. “Dorab Mistry’s bullish forecast is also helping the market.”
Futures may climb to 2,800 ringgit to 3,000 ringgit by the end of March, Dorab Mistry, director of Godrej International Ltd., one of India’s biggest importers of vegetable oils, told a conference in New Delhi yesterday. On December 4, he predicted the commodity would reach 3,000 ringgit by the end of first quarter.
Palm oil has surged this year on rising demand from India and China, the biggest consumers. Stockpiles fell 2 per cent to 1.93 million tonnes from a 10-month high in October, the Malaysian Palm Oil Board said December 10.
“Supplies from Malaysia this month will be negative and stockpile will not build up significantly,” OSK’s Khor said.
Indonesia Shipments
Shipments from Indonesia in November were 1.25 million tonnes, down from 1.35 million tonnes in the previous month, the Palm Oil Association said yesterday.
PT Astra Agro Lestari’s sales of crude palm oil rose by 8.1 per cent to 951,203 tonnes in the 11 months to November, from 879,758 tonnes a year ago, the company said in a filing to the Indonesia Stock Exchange today.
September-delivery palm oil traded on the Dalian Commodity Exchange jumped as much as 2.3 per cent to 7,056 yuan ($1,033) a ton today, the most since December 7. The commodity last traded at 7,014 yuan.
China’s edible oil prices have increased partly because of higher global soybean prices, the commerce ministry said at a briefing in Beijing today. The government has taken measures to boost supply and large price volatilities are unlikely, Spokesman Yao Jian said.
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