KUALA LUMPUR: Malaysian palm oil futures rose to their highest in one month in early trade on Wednesday, supported by related edible oils and on expectations of stronger demand in the coming weeks.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was up 1.1 percent at 2,560 ringgit ($636.18) a tonne at the midday break. It earlier hit 2,573 ringgit, its strongest level since Dec. 5.
Trading volumes stood at 30,298 lots of 25 tonnes each.
“The Chinese New Year celebration is coming, demand should pick up from China,” said a trader from Kuala Lumpur.
“We may experience a rally this month on the back of better demand and firmer external pricing,” he added, referring to soyoil on both the Chicago Board of Trade and China’s Dalian Commodity Exchange.
Palm oil prices track the performance of other edible oils, as they compete for a share in the global vegetable oils market. The March soybean oil contract on the Chicago Board of Trade saw overnight gains of 0.9 percent, and was last up slightly by 0.2 percent on Wednesday.
In other related oils, May soybean oil on the Dalian Commodity Exchange was up 0.3 percent, while the Dalian January palm oil contract gained 0.6 percent.
Malaysian palm oil shipments, which had gained 6-9 percent on-month in December according to cargo surveyor data, are expected to further rise in January on improved demand from China.
The world’s second largest palm oil importer after India is expected to stock up ahead of the Lunar New Year celebrations, which sees increasing palm oil consumption for cooking purposes.
Global demand for Malaysian palm declined 11.9 percent to 1.35 million tonnes in November, as consumption fell during the year-end winter months which solidifies the tropical oil.
Source: Brecorder.com
