(For physical price assessments, see MPOI1.)
Sept. 6 (Bloomberg) -- Palm oil posted a fourth weekly gain on speculation that rising demand from India and China may restrain a buildup in stockpiles in Malaysia as output expands seasonally in the world’s second-largest producer.
Palm for November delivery rallied 1.3 percent to 2,444 ringgit ($735) a metric ton on the Bursa Malaysia Derivatives, the biggest gain since Aug. 26. Futures climbed 1.7 percent this week, the best weekly run since the period to June 7. Palm oil for physical delivery in September was at 2,455 ringgit, data compiled by Bloomberg show.
Futures have rebounded since reaching the lowest since October 2009 on July 26 on speculation that a rally in soybeans, crushed to yield an alternative oil, would boost demand for palm. While palm reserves in Malaysia probably expanded 3 percent to 1.71 million tons in August from July, according to a Bloomberg survey, that’s still 19 percent lower than a year ago.
“The stock levels at this juncture are lower than a year ago, so from a starting point we’re better off already as we head into the high-production season,” Ivy Ng, an analyst at CIMB Investment Bank Bhd., said by phone in Kuala Lumpur. “Demand is going to be strong ahead of festive events in India and China’s Mid-Autumn festival.”
India, the world’s biggest importer, celebrates the festival of Diwali on Nov. 3, while markets in China will be closed for the Mid-Autumn Festival on Sept. 19 and 20.
Futures may trade in a range of 2,200 ringgit to 2,600 ringgit in the near term, supported by a weaker ringgit and higher crude oil prices, Ng said. The ringgit has lost 8.1 percent this year as investors shunned emerging-market assets.
Soybeans for November delivery climbed 0.3 percent to $13.71 a bushel on the Chicago Board of Trade, heading for a fifth weekly gain. Soybean oil for delivery in December rose 1.3 percent to 44.08 cents a pound.
Refined palm oil for January delivery climbed 1.5 percent to close at 5,652 yuan ($924) a ton on the Dalian Commodity Exchange. Soybean oil increased 1.7 percent to end at 7,310 yuan a ton.
--Editors: Jake Lloyd-Smith, Thomas Kutty Abraham