BLBG: Palm Oil Futures Climb as Weather Threatens Oilseeds Crops in China, India
Palm oil climbed on speculation that China and India, the biggest users, may need to increase imports as weather threatens to lower local oilseed production.
December-delivery futures advanced 0.3 percent to 2,677 ringgit a metric ton ($866) at the midday break in trading on the Malaysia Derivatives Exchange. Earlier, the most-active contract swung between gains and losses.
“The weather is playing a crucial role in determining commodity prices, be it palm oil or soybeans,” said Pawan K. Poddar, director at Mumbai-based Poddar’s Agro Trading Co. “Damage to Chinese crop may prompt them to import more and excess rain is damaging the oilseed crop in India.”
Soybeans jumped to a 15-month high in intraday trading on Sept. 20 as a cold snap threatens crops in China, the biggest user of the oilseed. Freezing weather this week in northeastern China will reduce crop quality and output, after rains delayed planting, according to T-Storm Weather Inc.
U.S. shippers sold 170,000 tons of soybeans to China for delivery before Aug. 31, the U.S. Department of Agriculture said yesterday.
India, the top buyer of vegetable oils after China, may import a record amount of soybean and palm oils for a fourth year as growing population and incomes drives demand for fried and processed foods, Ashok Sethia, president of the Solvent Extractors’ Association of India, said yesterday.
Purchases may reach 9.5 million tons in the year starting Nov. 1, from 9 million tons this season, he said.
“There’s always uncertainty in the palm oil market ahead of the peak harvests in Indonesia and Malaysia and as the main soybean harvests wind up around the world,” Poddar said. “The trade may remain choppy in the next few sessions.”
December-delivery soybean oil traded in Chicago added as much as 0.6 percent to 43.06 cents a pound. November-delivery soybeans rose as much as 0.5 percent to $10.8575 a bushel.
The Dalian Commodity Exchange is closed for holidays.
To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
