Malaysian palm oil futures moved off three-week lows on Thursday to trade about 1 percent higher for their first gain in three sessions after cargo surveyor data showed stronger export demand in May. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 1 percent at 2,607 ringgit ($609.54) a tonne by the close, having touched its lowest since May 5 at 2,566 ringgit.
However, it has shed more than 1 percent so far this week, heading for its sharpest weekly drop since mid-April. Traded volumes stood at 38,576 lots of 25 tonnes each on Thursday evening. "Palm prices were supported by stronger export data," one Kuala Lumpur-based trader said, adding that forecasts of slowing production growth were another price-supporting factor.
Cargo surveyor Intertek Testing Services said that May 1-25 palm oil shipments from Malaysia, the world's second largest producer, rose 16.2 percent compared with the same period last month, supported by stronger demand from India. Another cargo surveyor, Societe Generale de Surveillance, reported a 12.9 percent gain for the same period. Traders forecast rising demand for the full month of May, when major palm oil consumers such as India, Pakistan and the Middle East ramp up consumption ahead of Ramazan.
The Muslim festival involves day-long fasts, which end with communal feasting, resulting in higher palm oil usage for cooking purposes. In related vegetable oils, soyabean oil on the Chicago Board of Trade rose 0.5 percent, while the September soyabean oil contract on the Dalian Commodity Exchange was down 0.1 percent. The September contract for palm olein dropped by 0.4 percent.