Malaysian palm oil futures rose to a nine-month high on Friday, as an upbeat demand outlook for the edible oil supported prices and investor optimism returned after earlier fears of a slowdown in global growth and commodity demand. Palm oil fell to a nine-day low on Thursday after data showed China's economic momentum slowed in March as factory activity shrank for a fifth straight month, leaving investors fretting about the risks to global growth.
But palm oil traders are betting on increased buying interest from the other major palm oil importers, Europe and India, to support the tropical oil, lifting futures to notch a yearly gain of 8 percent this year. "Exports should be better than last month, and that should hold the market above 3,300 ringgit," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Benchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange gained 2.5 percent to close at 3,426 ringgit ($1,097) per tonne, lifting futures to post a gain of 0.8 percent this week. Traded volumes stood at 32,759 lots of 25 tonnes each, higher than the usual 25,000 lots as traders were short covering ahead of the weekend.
Malaysian exports jumped 14 percent for the first 20 days of March from a month ago, according to cargo surveyors, and market players are expecting the trend to continue for the March 1-25 data due on Monday. Traders are also keeping an eye on the US Department of Agriculture planting forecasts due at the end of the month to gauge soybean output for the year. Lower soybean output could support prices of palm oil, which competes with soybean oil for uses in food and biofuels. In other vegetable oil markets, the most active US soyoil contract for May delivery gained 1.5 percent in Asian trade while the most active September 2012 soyoil contract on China's Dalian Commodity exchange also rose 0.9 percent.
Comments
Comments are closed.