News
26.10.2009
Malaysian palm oil up
Malaysian crude palm oil futures rose 1.3 percent to their highest closing in more than seven weeks on Friday, underpinned by strength in rival soybean and crude oil prices, traders said. The tropical oil - used in various products from soap to biodiesel - gained 2.8 percent this week, extending its winning streak to a third consecutive week.
Traders said despite the rally, palm still lagged rival soybean as well as crude oil, leaving scope for further gains next week. "If you look at olein to soybean oil, the premium is now at around $140 while normally it is around $100. So palm is cheaper," said a trader at a Kuala Lumpur-based brokerage.
Crude oil, which has gained more than 80 percent so far this year, hit a one-year high of $82 a barrel on Wednesday, bolstering hopes for a revival of biodiesel demand for palm oil, the trader said. The benchmark January contract on the Bursa Malaysia Derivative Exchange settled up 28 ringgit at 2,238 ringgit ($662.13) a tonne, a level not seen since September 2. Overall volume was 16,202 lots of 25 tonnes each.
Oil prices edged higher on Friday, holding above $81 a barrel, but scepticism economic recovery was robust enough to spur a convincing rise in fuel demand curbed the appetite to extend this week's powerful rally. Energy prices tend to hold some sway over vegetable oil markets as petroleum diesel competes with biodiesel. Chicago grain and soybean futures rose more than 1 percent on Friday to hit fresh multi-month highs, driven by the dollar's weakness and concerns over wet weather hampering US harvests and plantings.
INDONESIA TRADES In Indonesia, the state marketing centre, based in Jakarta, did not sell any of 12,500 tonnes of crude palm oil at auction due to low bids. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold a palm oil tender.
Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 6,600-6,675 rupiah ($0.696) per kg, against 6,550-6,600 rupiah a day ago. In the Malaysian physical market, palm oil for October and November delivery was traded at 2,230-2,242.50 ringgit in the southern region and at 2,225-2,242.5 ringgit in the central region.
Reuters
