Palm oil gains as prices at five-week low spur buying interest

Palm oil gains as prices at five-week low spur buying interest
Business & Markets 2013
Written by Bloomberg
Monday, 23 September 2013 18:29

23 Sep 2013 18:24

(Sept. 23): Palm gained, snapping three days of declines, as prices at a five-week low prompted buying and a weakening in the Malaysian currency boosted the appeal of ringgit-denominated futures.

The contract for delivery in December advanced 0.4 percent to close at 2,309 ringgit ($721) a metric ton on the Bursa Malaysia Derivatives. Futures earlier touched 2,279 ringgit, the lowest price for the most-active contract since Aug. 14. Palm for physical delivery in October was at 2,310 ringgit today, data compiled by Bloomberg show.

Palm, the most-used cooking oil, lost 2 percent last week following the ringgit’s biggest surge since 1998 after Federal Reserve Chairman Ben S. Bernanke unexpectedly refrained from cutting stimulus. The Malaysian currency fell the most in three months today on speculation that gain was excessive.

“The current low price in palm oil may still attract some overseas buyers and refiners to purchase palm oil,” according to Teoh Say Hwa, an analyst at Phillip Futures Pte in Singapore.

The depreciation of the ringgit today made palm oil more attractive to buyers, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari Sdn. in Selangor.

Palm oil may slump to the lowest since 2009 by January as global oilseed supplies expand and crude oil weakens, according to Dorab Mistry, director at Godrej International Ltd. Futures will probably retreat to 2,000 ringgit a ton by January if Brazil and Argentina, the largest soybean growers after the U.S. in 2012-2013, harvest bigger crops and Brent crude drops below $100 a barrel, Mistry told an industry conference in Mumbai yesterday. Prices will not slide below 2,200 ringgit in the next few weeks and will trade from 2,200 to 2,400 ringgit, he said.

Soybeans for delivery in November were little changed at $13.1475 a bushel on the Chicago Board of Trade. Soybean oil for December delivery fell 0.3 percent to 42.23 cents a pound.

Refined palm oil for January delivery declined 0.5 percent to close at 5,364 yuan ($876) a ton on the Dalian Commodity Exchange. Soybean oil lost 0.5 percent to end at 7,038 yuan a ton.