By Claire Leow
Jan. 9 (Bloomberg) -- Palm oil futures in Kuala Lumpur, poised for a third week of gains, traded near a three-month high on optimism Malaysian stockpiles may fall from a record as production slows and demand increases.
“Recent strength in crude palm oil prices is supported mainly by increased demand ahead of the Lunar New Year,” said Fordyanto Widjaja, an analyst at Morgan Stanley Research Asia Pacific in a report today.
March-delivery palm oil rose as much as 4.5 percent to 1,948 ringgit ($550) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures were at 1,914 ringgit at 4:15 p.m. as trading resumed in the afternoon.
China, the world’s largest consumer of vegetable oils, marks the lunar New Year at the end of this month when families travel to reunite and share communal meals. Shipments from Malaysia, the second-largest producer of palm oil, rose 25 percent to 1.65 million tons in December from November, the most in three months, surveyor Intertek said Jan. 2. Exports to China rose between Dec. 26-31, according to surveyor Societe Generale de Surveillance.
Malaysia’s palm oil stocks climbed to a record 2.27 million tons in November. The nation’s palm oil board, due to announce December production, exports and inventory, usually reports the data on or after the tenth of each month.
Palm oil is the cheapest cooking oil. Soybean oil traded in Chicago is 49 percent more expensive than Malaysian palm oil, according to Bloomberg data.
Soybean oil for March delivery gained as much as 2 percent to 36.49 cents a pound in after-hours trading on the Chicago Board of Trade, and was at 36.39 cents at 4:08 p.m. Singapore time.
Palm oil futures on the Dalian Commodity Exchange for May delivery closed 2.3 percent higher at 5,496 yuan ($804) a ton, for a 10 percent gain this week. Dalian soybean oil gained 1.6 percent to 6,456 yuan a ton, or 6.3 percent higher for the week.
To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net
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