Malaysian palm oil futures rose to their highest in two weeks on Wednesday, boosted by a combination of data showing a rise in exports and expectations for an uptick in demand ahead of the Muslim holy month of Ramadan. The benchmark July contract on the Bursa Malaysia Derivatives Exchange ended 0.7 percent higher at 2,604 ringgit ($809) per tonne after climbing to 2,614 ringgit, its highest since April 30.
Total traded volume amounted to 32,399 lots of 25 tonnes, below the usual 35,000 lots. "It has a lot to do with good export data for the first 10 days and also demand and restocking ahead of the fasting month - it (restocking) should have started in India and Pakistan," said Alan Lim, an analyst with Kenanga Investment Bank. After market hours on Monday, cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products had risen 25.9 percent for May 1-10. Malaysian markets were closed on Tuesday for Wesak Day.
Intertek Testing Services, another cargo surveyor, had earlier reported that exports of Malaysian palm oil products for May 1-10 surged about 28 percent to 391,856 tonnes compared with a month earlier on the back of stronger demand from India, China and Europe. India's palm oil imports are expected to rise in May to up to 600,000 tonnes as the world's biggest buyer rushes to meet demand for cooking oil ahead of the Muslim festival, according to the Sandeep Bajoria, chief executive of Mumbai-based brokerage Sunvin Group.
Its palm imports had fallen by more than expected to 536,175 tonnes in April, data from the Solvent Extractors' Association of India showed on Wednesday. Traders are now looking ahead to Intertek Testing Services and Societe Generale de Surveillance to release Malaysia's May 1-15 export data on May 15, added Lim, who forecasts an average CPO price of 2,800 ringgit per tonne.
In other news, Golden Agri-Resources Ltd, Indonesia's largest palm oil firm, said net profit dropped 8 percent for the quarter ended March 31 on the year as lower contributions from downstream businesses more than offset the boost from higher palm oil prices. In competing vegetable oil markets, the US soyoil contract for July added 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange climbed 0.7 percent.