Mumbai: Palm oil futures in Malaysia, the world’s largest grower last year, rose almost to a three-week high on increased demand from China and India, the world’s biggest buyers of the vegetable oil.
India may import at least five million tonnes of edible oils in the year to October, 14% more than last year, as an expanding economy spurs consumer demand, according to A.R. Sharma, president of Solvent Extractors’ Association of India.
Palm oil for July delivery, the most active contract, rose as much as 44 ringgit, or 2%, to 2,258 ringgit ($659.80) a tonne on the Malaysia Derivatives Exchange, the highest intra-day level since April 16. The contract ended the morning session at 2,258 ringgit at 12:30pm local time.
“India has stepped up purchase of palm oil to meet the shortage of production locally,” Govindlal G. Patel, director of Dipak Enterprises, an edible oil trader based in Rajkot in western Gujarat state, said over the phone. “There is a shortage in palm oil caused by increased imports by China, the US and some European countries.”
Malaysia’s palm oil exports rose 13% to 1.23mt in April from a month earlier, according to estimates by independent cargo surveyor Societe Generale de Surveillance.
Palm oil, used for cooking and to derive chemicals to make soaps and lubricants, is the world’s most consumed and traded vegetable oil.
It may rise to more than 2,500 ringgit ($731) a tonne this year on rising demand from India and China, Dorab Mistry, director at Godrej International Ltd, one of India’s biggest buyers of vegetable oils, said at a conference in Jakarta. The prediction is 4.2% higher than a forecast of 2,400 ringgit a tonne that Mistry made on 14 March.
Malaysian stockpiles of the commodity plunged in March to a 19-month low, dropping 11% to 1.34mt, Malaysian Palm Oil Board said on 11 April. Indonesia may produce a record 17.4mt of palm oil this year, surpassing Malaysia as the world’s top grower, as higher yields and acreage offset the effect of a drought last year, Derom Bangun, head of Indonesian Palm Oil Association, said 2 May.