(For physical price assessments, see MPOI1.)
Oct. 16 (Bloomberg) -- Palm oil gained to the highest level in more than five weeks after data showed that shipments increased from Malaysia, the world’s second-largest producer.
The contract for delivery in December rose 1.7 percent to 2,403 ringgit ($757) a metric ton on the Bursa Malaysia Derivatives, the highest level at close for most-active futures since Sept. 6. Palm for physical delivery in November was at 2,380 ringgit today, data compiled by Bloomberg show.
Exports from Malaysia gained 6.6 percent to 781,043 tons in the first 15 days of October from the same period a month earlier, surveyor Intertek said today. Demand from India, the biggest importer, may have increased because of the Diwali festival on Nov. 3, according to Mumbai-based Commtrendz Risk Management Services Pvt.
“We’re seeing possible festival demand from India,” said Gnanasekar Thiagarajan, a director at Commtrendz. “Palm is the preferred choice of oil, especially in the festival season.”
Malaysian exports climbed for a fourth month in September, as reduced supplies of substitutes boosted demand for the most- consumed cooking oil, Malaysian Palm Oil Board data show. Shipments from Indonesia, the biggest producer, advanced last month for the first time since May, according to the country’s palm oil association.
Biodiesel consumption in Indonesia may exceed 3.3 million kiloliters in 2014 from an estimated 900,000 kiloliters this year after the government raised the blending requirement, Paulus Tjakrawan, secretary general of Indonesian Biofuels Producers Association, said today.
The country last month raised the amount of palm-derived biodiesel that producers must blend into subsidized fuel to 10 percent from 7.5 percent, according to a regulation signed by Energy and Mineral Resources Minister Jero Wacik on Aug. 28. The requirement will be extended to non-subsidized fuel and industrial users in January and power plants will be obliged to use supply with a 20 percent blend.
“Prices may be boosted by the swift Indonesian biodiesel plan implementation,” said Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd. “More biodiesel being used locally in Indonesia means that the seasonal additional supply in September and October has been well absorbed.”
Soybeans for delivery in November gained 0.5 percent to $12.73 a bushel on the Chicago Board of Trade, while soybean oil for December climbed 1.1 percent to 41.10 cents a pound.
Refined palm oil for January delivery fell 0.2 percent to close at 5,662 yuan ($928) a ton on the Dalian Commodity Exchange and soybean oil for May delivery climbed 0.2 percent to end at 7,086 yuan a ton.
--With assistance from Yoga Rusmana in Jakarta. Editor: Ovais Subhani