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Malaysia palm oil futures rise on export jump, India slump

Malaysia palm oil futures rise on export jump, India slump
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First Published: Wed, Mar 21 2007. 12 06 AM IST
Updated: Wed, Mar 21 2007. 12 06 AM IST
Kuala Lumpur: Palm oil futures rose for a second day in Malaysia amid speculation that supply may lag behind demand, and following a forecast that India’s oilseed output may decline in the year to October.
Malaysia’s crude palm oil exports jumped 89.2% this month, compared with a month earlier, a report by the leading independent cargo surveyor said on Tuesday.
India, the world’s second-biggest vegetable oil buyer, may also need to import more as a trade body forecast the country would produce 5.4% less oilseeds in the year to October from a year earlier.
“Demand will definitely exceed supply so you can expect prices to continue to go up,” said Richard Liew, an analyst at ECM Libra Securities Sdn. in Kuala Lumpur. “Some producers are holding back inventory,” he added.
Palm oil for June delivery, the most active contract, rose as much as 10 ringgit, or 0.5%, to 1,980 ringgit ($566/Rs24,904) a tonne on the Malaysia Derivatives Exchange in Kuala Lumpur. It settled at 1,977 ringgit.
Societe Generale de Surveillance, the leading independent surveyor of Malaysian palm oil exports, said it tracked 596,774 tonnes of shipments from 1 March to 20 March, down 6.1% from a month earlier. A breakdown showed crude palm oil exports rose to 140,454 tonnes, up from 74,222 tonnes.
The group, based in Malaysia, gives forecasts of bulk shipments via Malaysian ports five times a month.
India’s production of oilseeds such as soyabean, mustard, peanuts and sunflower would be 22.67 million tonnes (mt), compared with 23.97mt a year earlier, an official at the Central Organization for Oil Industry and Trade said on Monday.
Malaysian palm oil futures have gained 30% in the past six months. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
Malaysia and Indonesia produce 85% of the world’s palm oil. Palm oil is used in foods and, increasingly, as an additive that is blended with regular fuels.
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First Published: Wed, Mar 21 2007. 12 06 AM IST
More Topics: Money Matters | Commodities |