By Claire Leow May 20 (Bloomberg) -- Palm oil futures posted their biggest gain in more than three weeks after export data showed a pickup in demand from China, the largest consumer of edible oils. August-delivery palm oil rose 1.7 percent to 2,476 ringgit ($754) a metric ton, the biggest one-day advance since April 23, on the Malaysia Derivatives Exchange. Malaysia’s palm oil exports rose 7.1 percent to 775,995 tons in the first 20 days of May, with higher shipments to China and India offsetting lower deliveries to Europe, Intertek data showed. Exports to China rose 21 percent to 219,260 tons. “We are optimistic that the crude palm oil sector outlook is still good,” said Herman Koeswanto, an analyst at PT Andalan Artha Advisindo Sekuritas in Jakarta. There was “strong demand in Asia,” Koeswanto said. Societe Generale de Surveillance, another surveyor, said Malaysia’s exports gained 3.2 percent to 791,971 tons in the 20- day period. Shipments to China jumped 44 percent, SGS estimated. Shipments to China and India gained after slumping in April, when the two countries switched to soybean supplies from South America. The pickup comes after China on April 1 banned imports of Argentine soybean oil, saying quality standards were breached. Shipments of Malaysian palm oil to the European Union, the second-largest destination, dropped 27 percent to 131,508 tons, Intertek said. The plunge was 40 percent, according to SGS. The debt crisis in Europe has driven the euro to a four- year low against the dollar, curbing importers’ purchasing power. The Malaysian ringgit has surged 24 percent against the euro this year. While “the numbers have come in positive all month, crude palm oil prices are still quite weak,” having reached the lowest in more than three months this week, said Arhnue Tan, a senior analyst at ECM Libra Capital Sdn. Crude Oil Palm oil’s advance today was also helped by crude oil, which jumped during Asian trading as much as 2 percent to $71.29 a barrel. It later fell in European trading to $69.60 a barrel. The premium of soybean oil over palm oil has widened to $74.31 a ton from a 52-week low of $54.94 three weeks ago, according to Bloomberg data. Palm oil enjoyed a “competitive advantage among oilseeds,” said Koeswanto at Andalan Artha. Soybeans in Chicago climbed as much as 1 percent to $9.4775 a bushel and were last at $9.4225. Soybeans, which are crushed to make a rival vegetable oil, have lost 10 percent this year amid a record global crop. Soybean oil has dropped 8.6 percent. Palm oil may advance to as much as 2,480 ringgit this week if soybeans don’t fall to less than $9.30 a bushel, Scott Briggs, agricultural commodities strategist at Australia & New Zealand Banking Group Ltd., said yesterday. Palm oil for January delivery on the Dalian Commodity Exchange jumped 0.9 percent to 6,630 yuan ($971) a ton, while soybean oil gained 0.7 percent to 7,562 yuan. --Editor: Jake Lloyd-Smith To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net To contact the editor responsible for this story: Jim Poole at jpoole4@bloomberg.net

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