Palm oil gained for the first time in three days, paring a weekly loss, on speculation that demand may increase for the vegetable oil as a biofuel feedstock.
The contract for August delivery climbed as much as 0.8 per cent to RM2,444 a metric tonne on the Bursa Malaysia Derivatives and traded at RM2,439 at 5.22pm in Kuala Lumpur. Futures are down 0.7 per cent this week, set for the first such loss since the five days ended May 3. Palm for local physical delivery in June was at RM2,420, according to data compiled by Bloomberg.
Malaysia, the world’s second-largest producer, stands to win biodiesel market share from Indonesia after the biggest palm oil producer was hit with EU tariffs, Datuk Sabri Ahmad, chief executive officer of Felda Global Ventures Holdings, said today. Malaysia’s exports of global biodiesel may jump to 300,000 tonnes this year, he said.
“Support has come from the soy complex,” said Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt Ltd. “Some support is also being seen as there are bits and pieces of news coming on exports regarding biodiesel and the purchases for Ramadan.”
Demand typically picks up ahead of Ramadan, which falls in July this year, when Muslims break day-long fasts with communal meals, and the Eid festival in August.
Sabri expects palm oil prices to trade between RM2,400 a tonne and RM2,600 from July to December. Prices will be supported by biodiesel demand, even though there are concerns about demand from India and China, the biggest consumers, as economic growth slows, he said.
Soybean oil for December delivery climbed 0.4 per cent to 47.33 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November climbed 0.4 per cent to US$13.05 a bushel.
Refined palm oil for January delivery retreated 0.9 per cent to close at 6,218 yuan (US$1,014) a tonne on the Dalian Commodity Exchange, while soybean oil for delivery in September lost 0.2 per cent to 7,408 yuan.– Bloomberg
Source : Business Times