Malaysian palm oil futures rose to near three-month highs on Tuesday as demand for the tropical oil spiked ahead of Ramazan, raising investors' expectations that stocks in the No 2 producer will ease. Exports of Malaysian palm oil in the first half of June surged as much as 19 percent as buyers stocked up for Ramazan that falls in July. During Ramazan, communal feasting typically drives up consumption of the vegetable oil.
"We are moving into the festive season and demand is expected to pick up from Pakistan, India and the Middle East," said a trader with a foreign commodities brokerage. The benchmark September contract on the Bursa Malaysia Derivatives Exchange closed 0.2 percent higher at 2,466 ringgit ($781) per tonne on Tuesday. Prices had earlier climbed to 2,480 ringgit, the highest level since March 25.
Total traded volumes stood at 29,955 lots of 25 tonnes each, slightly lower than the average 35,000 lots. Technicals showed palm oil is expected to rise to a range of 2,509-2,534 ringgit per tonne, as an uptrend has extended, said Reuters market analyst Wang Tao. Malaysia's palm oil stocks currently stand at 1.82 million tonnes, more than 5 percent lower compared to April, as exports outstripped near-stagnant output.
The government said on Monday it will keep its export duty for crude palm oil in July at 4.5 percent. Investor sentiment was cautious ahead of this week's US Federal Reserve policy meeting, which could see the world's biggest economy curbing its stimulus programme and potentially crimping global commodity demand. In vegetable oil markets, US soyaoil for July rose 0.3 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange gained 0.9 percent.
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