JAKARTA: Malaysian crude palm oil futures edged up yesterday as investors bet prices would rise further after a long weekend because drought may lead to bigger demand for the tropical oil from key buyer India, traders said.
Traders said top palm producers Indonesia and Malaysia will benefit from any shortfall in India’s soy output, a situation that will drive prices higher.
“I think as a result of a shortfall, one million tonnes of (additional) palm oil will go to India,” said a trader at a Kuala Lumpur-based commodities brokerage.
India’s soybean output may drop as much as 19 per cent in the new season because of failed monsoon rains, reducing soymeal export deals to a trickle, traders and industry officials said
Planting of soybeans, India’s main summer-sown oilseed crop, was delayed this year as the June-September monsoon rains arrived late in central India, the main producing region in the world’s top edible oils buyer.
“I think the palm price will go higher next month and will not be linked with soy,” the same trader said, adding that soy price upside is capped by US bumper crop outlook.
The benchmark November palm oil futures on the Bursa Malaysia Derivatives Exchange rose RM20, or 0.9 per cent, to RM2,366 per tonne. Overall volume was 13,584 lots of 25 tonnes each.
The market will be closed on Monday for a public holiday.
In the Malaysian physical market, palm oil for August and September delivery was traded at RM2,350 in the southern and central regions.
Source : Business Times