Malaysian crude palm oil closed up 2.44 percent, after hitting a five-week-and-a-half week high on strong exports and firmer external markets.
A concern over erratic weather in many countries which has damaged grains crop, including vegetable oils as well as firmer crude oil, have offered support to the palm oil market, dealers said.
The benchmark September contract on Bursa Malaysia’s Derivatives Exchange closed up 58 ringgit or 2.44 percent to 2,439 ringgit a tonne after trading as high as 2,445 ringgit a tonne — a level last seen on June 7.
Overall volume stood at 30,313 lots of 25 tonnes each, three times the usual 10,000 lots.
“I didn’t expect the market to move up that much. But it looks like there is more good news,” a trader at a foreign-brokerage firm in Kuala Lumpur said.
“Production was good, crude oil is good and stock is lower. It will cause more buying to come in,” the trader said, adding the market is likely to test the 2,450 ringgit level in the coming days.
Cargo surveyor Intertek Testing Service said on Thursday exports of Malaysian palm oil products for July 1-15 rose 11.3 percent to 668,573 tonnes from June 1 to 15, while Societe Generale de Surveillance reported a 16.4 percent increase to 708,384 tonnes in the same period.
Talk in the market that Pakistan will buy a record quantity in July and August for Ramadan — a month-long fast from sunrise to sunset by Muslims — also helped the market to close higher, another trader said.
Based on SGS report, Pakistan bought nearly 20 percent of the palm oil exports in July 1-15 ahead of Ramadan.
While Muslims refrain from eating and drinking from dawn to sunset during Ramadan, consumption increases from when they break their fast to the next morning.
Pakistan in June cut duties on crude palm oil imports by more than 11 percent, a move which will benefit Malaysia which provides roughly 95 percent of Pakistan’s annual total palm oil import.
Oil reversed early losses and rose towards $78 a barrel on Thursday after a bounce in equities overshadowed earlier news pointing to flatter economic growth in the world’s number two oil consumer China. US soyoil for August delivery was trading up 0.84 percent on Wednesday, while the most active January soyoil contract on China’s Dalian Commodity Exchange rose 0.03 percent.
INDONESIA PALM TRADES
The Jakarta-based PT KPB Nusantara, formerly known as the state marketing centre, sold 7,500 tonnes of crude palm oil offered in an auction on Thursday with top price at 7,248 rupiah ($0.802) per kg, against 7,200 rupiah per kg on previous day.
Producers in Medan, home to Indonesia’s main palm oil export port of Belawan, sold crude palm oil with top price at 7,215 rupiah per kg. There was no auction in Medan on Wednesday.
Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used for cooking oil, 7,725 rupiah per kg, against 7,650 rupiah per kg on Wednesday.
Palm, soy and crude oil prices at 1000 GMT
Contract Last Net chg Settle Open High Low Volume
PALM OIL JUL0 2465 + 5.00 2460 2472 2472 2453 62
PALM OIL AUG0 2459 + 36.00 2423 2429 2473 2428 3110
PALM OIL SEP0 2439 + 58.00 2381 2381 2445 2378 15889
PALM OIL OCT0 2411 + 48.00 2363 2353 2418 2353 7038
CBOT soyoil* 38.47 + 0.36 38.11 NA 38.49 37.90 NA
NYMEX crude** 77.14 + 0.10 77.04 NA 77.20 76.50 NAPalm oil prices in Malaysian ringgit per tonne
* Soy oil in U.S. cents per pound
** Crude in USD per barrel
($1=3.2020 Malaysian Ringgit; 9,043 Rupiah)
Copyright Reuters, 2010