BLBG:Palm Oil Gains as Exports From Malaysia Climb on Ramadan Demand
Palm oil advanced for the first time in four days as exports from Malaysia, the second-largest producer, rose ahead of the Muslim fasting month of Ramadan.
The contract for September delivery climbed as much as 0.7 percent to 2,421 ringgit ($760) a metric ton on the Bursa Malaysia Derivatives and was at 2,406 ringgit at 5:30 p.m. in Kuala Lumpur. Futures closed at 2,404 ringgit yesterday, the lowest price for the most-active contract since June 5. Palm for local physical delivery in July was at 2,410 ringgit, data compiled by Bloomberg show.
Shipments from Malaysia gained 9.6 percent to 1.17 million tons in the first 25 days of June from the same period a month earlier, Intertek said today. Consumption typically increases ahead of Ramadan, which falls in July this year, when observers break day-long fasts with communal meals.
“Because of Ramadan, you’ll see incremental demand coming into the picture,” said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai.
Stockpiles of the most-used cooking oil are poised to jump 21 percent to a record 9.5 million tons in 2013-2014, U.S. Department of Agriculture data show. Demand will advance 4.4 percent, the least in 12 years. Futures will drop 8.6 percent to 2,200 ringgit a ton by the end of December, a level last seen in 2009, according to the median of 13 trader, analyst and producer estimates compiled by Bloomberg.
‘The gains will be capped because the market still has to live with the rising stocks,’’ Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt. in Mumbai. “So you wont have any kind of major rally.”
Soybean oil for December delivery rose 0.3 percent to 46.41 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November increased 0.4 percent to $12.7825 a bushel.
Refined palm oil for January delivery closed little changed at 5,924 yuan ($964) a ton on the Dalian Commodity Exchange, while soybean oil climbed 0.8 percent to end at 7,438 yuan.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
