Jakarta: Palm oil futures in Malaysia, the benchmark for the commodity, rose for a third day on the outlook for increased demand from India.
India’s palm oil imports may rise to 450,000 tonnes a month through to October, Dorab Mistry, director of Godrej International Ltd, a unit of one of India’s biggest vegetable oil traders, said on 25 July. Monthly shipments averaged 245,000 tonnes in the past eight months. The world’s second biggest buyer of vegetable oil last week cut import tariffs on crude palm oil to 45% from 50%. “Overall, we’re still bullish with India looking to boost imports,” Fordyanto Widjaja, an analyst at JP Morgan, said by telephone from Singapore.
Palm oil for October delivery, the most actively traded contract on the Malaysia Derivatives Exchange, rose as much as 43 ringgit, or 1.7%, to 2,626 ringgit a tonne.
The contract gained 3.1% last week, retracing its losses the previous week.
Demand may also rise with the Hindu festival of Diwali celebrated in November, as well as the Chinese mid-autumn harvest festival and the Muslim holy month of Ramadan starting in September.
Food demand typically rises for three of the world’s four most populated countries—China, India and Indonesia—in the second half of the year because of the festivities. China’s palm oil purchases in August last year doubled to 667,130 tonnes from the same month in 2005, according to customs data.
Malaysia’s palm oil exports rose 12% in the first 25 days of July to 936,720 tonnes, compared with the same period last month, led by increased sales to China, Societe Generale de Surveillance estimated on 25 July. Exports picked up from 20 July to 25 July, rising 86% to 298,557 tonnes compared with the same period in June, the cargo surveyor said.
Palm oil is also used in soaps and can be mixed with diesel to stretch fossil fuel supplies. Indonesia and Malaysia produce 90% of the world’s output of the commodity.