Malaysian palm oil futures stretched gains into a fourth straight session on Thursday, touching their highest in more than two weeks as a jump in export volumes in the first half of the month underpinned prices. Edible oil buyers in India, Pakistan and the Middle East typically replenish stocks of the tropical oil ahead of the holy month of Ramazan and Eidul-Fitr festivals.
Cargo surveyor Intertek Testing Services (ITS) data showed that exports of Malaysian palm oil products for May 1-15 rose 22.5 percent to 639,414 tonnes due to bigger purchases from the Indian region as well as Europe. "Exports are better than expected. Maybe the numbers could be even better throughout the second half of the month," said a trader with a foreign commodities brokerage.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange ended up 0.8 percent at 2,627 ringgit ($815) per tonne by Thursday's close, the highest since April 30. Prices traded in a range between 2,603 ringgit and 2,630 ringgit. Total traded volume stood at 29,706 lots of 25 tonnes, just below the average 35,000 lots. Technicals showed that palm oil may break resistance at 2,626 ringgit per tonne and rise further to 2,643 ringgit, said Reuters market analyst Wang Tao.
A return of the crop-damaging El Nino weather phenomenon would hinder production and boost prices, growers said, although the impact would depend on the severity of the drought in Southeast Asia. "Up to end 2012, CPO prices were consistently above $1,000 per tonne. We certainly think those numbers could return if El Nino happens and if it's a serious El Nino," Richard Fung, director of investor relations at Indonesia's biggest palm firm Golden Agri-Resources Ltd told reporters on Wednesday. In competing vegetable oil markets, the US soyoil contract for July rose 0.2 percent in early Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange edged up 0.1 percent.
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