Dec. 17 (Bloomberg) -- Palm oil climbed to the highest level in more than six months after crude oil and soybean oils rallied boosting prospects of the vegetable oil as a biofuel.
Oil rose 2.8 percent yesterday, the most in a month, after a U.S. government report showed a drop in crude and distillate supplies in the biggest energy consumer. Soybean oil jumped the most in more than three weeks in Chicago after soybeans gained on increased demand from China.
February-delivery futures advanced as much as 1.6 percent to 2,628 ringgit ($765) a metric ton on the Malaysia Derivatives Exchange, the highest intra-day level since June 2. The most- active contract traded at 2,608 ringgit at 12:30 p.m. break.
“There’s a good window for palm oil prices to gain until March when the soybean supplies from Latin America will start,” Sandeep Bajoria, chief executive of Sunwin Group said in Mumbai. “Gains in crude and soybean oils are further fueling gains.”
Palm oil may climb to 2,800 ringgit by February as China, India and the European Union boost purchases, he said. Prices have surged 54 percent this year on rising demand from India and China, the biggest consumers of edible oils.
Stockpiles fell 2 percent to 1.93 million tons from a 10- month high in October, the Malaysian Palm Oil Board said Dec. 10. Shipments from Indonesia last month were 1.246 million tons, down from 1.347 million tons in October, the Palm Oil Association said on Dec. 15.
‘Robust Demand’
“Palm oil supplies are going to be lower in the coming months and demand is still robust in the main importing countries,” Bajoria said.
Crude oil for January delivery traded at $72.17 a barrel, 0.7 percent lower, in New York at 12:13 p.m. Singapore time as the dollar rose to a three-month high against the euro.
January-delivery soybean oil traded 0.6 percent lower at 40.49 cents a pound at 12:15 p.m. Singapore time. The price jumped 1.8 percent yesterday, the most since Nov. 25.
The premium of soybean oil in Chicago over palm oil in Malaysia narrowed 8.7 percent to $131.63 a ton today, from $144.15 yesterday, according to Bloomberg data.
To contact the reporter on this story: Thomas Kutty Abraham at tabraham4@bloomberg.net
