Palm oil trades near five-week high as Malaysian exports advance

Palm oil trades near five-week high as Malaysian exports advance
Business & Markets 2013
Written by Bloomberg
Wednesday, 21 August 2013 12:10

(Aug. 21): Palm oil traded near a five-week high on speculation that increasing shipments from Malaysia, the second-largest producer, signal improving global demand.

The contract for November delivery swung between gains and losses of at least 0.4 percent before trading little changed at 2,332 ringgit ($708) a metric ton on the Bursa Malaysia Derivatives by 11:52 a.m. in Kuala Lumpur. Futures closed at 2,333 ringgit on Aug. 19, the highest price since July 11. Palm for physical delivery in September was at 2,400 ringgit yesterday, according to data compiled by Bloomberg.

Exports climbed 10 percent to 880,979 tons in the first 20 days of this month from the same period in July, surveyor Intertek said yesterday. Shipments gained 12 percent in the same period, according to SGS (Malaysia) Sdn. Bhd.

“Demand has been fairly supportive,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. “Supply is tight because stocks are lower than a year ago so a lot of people are banking on the higher production that we’re going to see over the next few months to replenish some of those stocks.”

Inventories in July were at 1.66 million tons, 17 percent down from a year ago, according to data from the Malaysian Palm Oil Board. Output, which rose 18 percent last month from June, typically is highest from July to October each year.

Soybean oil for delivery in December climbed 0.2 percent to 43.25 cents a pound on the Chicago Board of Trade. Soybeans for November lost 0.2 percent to $12.8775 a bushel.

Refined palm oil for January delivery was little changed at 5,546 yuan ($906) a ton on the Dalian Commodity Exchange. Soybean oil was also little changed at 7,136 yuan a ton.