Singapore: Palm oil futures in Malaysia rose to a one-week high as gains in crude and soya bean oil raised its appeal for use as a substitute in both food and biofuels.
The vegetable oil has gained almost 9% in two days on expectations of a pick-up in seasonal demand. Crude oil has risen 2.2% and soya bean oil added 2.8% in the period. Palm oil competes with soya bean oil in use for cooking oil and biofuel.
“Crude oil’s going up. Soya and corn have gone up as well,” James Gruber, analyst at CLSA Asia Pacific Markets, said by phone from Kuala Lumpur on Thursday. “It’s purely the function of commodities in general going up.”
Palm oil for November delivery rose as much as 3.1% to 2,672 ringgit (Rs35,157) a tonne and closed at 2,653 ringgit in Kuala Lumpur. Prices have plunged 41% from the 4 March record of 4,486 ringgit.
Demand for palm oil may rise as Muslim nations in West Asia celebrate Id-ul-Fitr in October, and India increases purchases before the festival of Diwali in the same month, according to Ben Santoso, an analyst at DBS Vickers Securities (Singapore).
China, the world’s biggest buyer of oilseed, may import 3.37 million tonnes (mt) of soya beans and 320,000 tonnes of palm oil this month, the ministry of commerce said in the first such fortnightly report, posted on its website on Wednesday.
Crude for October delivery rose as much as 1.6% to $117.44 (Rs5,120) a barrel in New York on Thursday, gaining for a third day, while soya bean oil advanced for a second day gaining as much as 1.7% to 54.76 cents a pound (450g) inChicago.
Meanwhile, Indonesia’s state marketing centre accepted all 10,000 tonnes offered in a tender on Thursday, Aziz Kahar, head of sales, said from Jakarta.
The centre, that markets palm oil from state plantations, sold 2,000 tonnes Medan in North Sumatra to PT Musim Mas and 3,000 tonnes Belawan in North Sumatra to PT Nubika Jaya, both sales were at 6,896 rupiah (about Rs33) a kg. PT Nagamas Palmoil Lestari bought 2,000 tonnes from Dumai Port in Riau at 6,896 rupiah a kg.
Yoga Rusmana and Naila Firdausi in Jakarta, William Bi in Beijing and Pratik Parija in New Delhi also contributed to this story.