Palm oil set for second weekly gain

Palm oil headed for a second weekly advance on speculation that exports
from Malaysia, the world’s second-largest producer, may rebound and
trim stockpiles.


The contract for August delivery, the most active by volume, gained
as much as one per cent to RM2,338 a metric tonne on the Bursa Malaysia
Derivatives and was at RM2,331 at 11.55am in Kuala Lumpur. Futures are
0.5 per cent higher this week.


Consumption usually rises during the Muslim fasting month of
Ramadan, boosting purchases from the Middle East to South Asia
including India, the world’s biggest buyer. Reserves in Malaysia fell
11 per cent to 1.93 million tonnes in April, the lowest level since
June and down from a record 2.63 million tonnes in December, the
nation’s Palm Oil Board said May 10.


"Market players are positive on palm oil because they are
anticipating demand to improve going ahead and inventories to draw down
in May," said Donny Khor, deputy director of futures and commodities at
RHB Investment Bank Bhd in Kuala Lumpur. Gains in soybean futures also
boosted palm oil, he said.



Refined palm oil for September delivery gained 0.5 per
cent to 6,072 yuan (US$989) a tonne on the Dalian Commodity Exchange,
while soybean oil increased 0.8 per cent to 7,470 yuan. On the Chicago
Board of Trade, soybeans for July delivery rose 0.5 per cent to
US$14.3475 a bushel and soybean oil for the same month advanced 0.6 per
cent to 49.79 cents a pound.-- Bloomberg