By Claire Leow and Yoga Rusmana Feb. 17 (Bloomberg) -- Palm oil advanced the most in eight days to a six-week high after a rally in crude oil increased the appeal of biofuels made from the tropical commodity. April-delivery futures added 1.6 percent to 2,620 ringgit ($773) a metric ton on the Malaysia Derivatives Exchange, after gaining as much as 2 percent earlier. Trading of the benchmark contract resumed after a two-day holiday marking the Chinese Lunar New Year. Crude oil traded in New York climbed the most in more than four months yesterday and soybean oil, the main substitute for palm oil, added 2.2 percent. Palm oil remains in “a structural up-cycle” and may average 2,800 ringgit this year and 3,500 ringgit next year, “supported by a resumption of U.S. dollar weakness, higher crude oil prices and tight edible oil stocks,” Adrian Foulger, an analyst at Standard Chartered Bank, said today. The tropical commodity advanced 52 percent last year as the Dollar Index fell 4.2 percent and crude oil surged 78 percent. Crude oil in New York for March delivery surged 3.9 percent yesterday and added 0.5 percent to $77.28 at 6:09 p.m. Singapore time. The Dollar Index was little changed after falling 0.8 percent yesterday, the steepest drop since Nov. 25. Markets in China are closed this week. Increased demand in India and higher crude oil prices are supporting prices, which “look like stabilizing at $700-$750,” Indonesia Trade Minister Mari Pangestu said today. Indonesia is the largest producer of palm oil, mostly used in cooking. There’s “potential increase in India’s demand due to the reduction in production of oilseeds due to the monsoons,” she said in a television interview. India Demand Vegetable oil imports by India, the biggest consumer after China, rose 10 percent in the November-January period to 2.41 million tons, the Solvent Extractors’ Association of India said. Indonesia accepted bids for 7,500 tons of the commodity in auctions. Delivery from Belawan and Dumai ports in Sumatra, the main export points, fetched between 7,565 and 7,575 rupiah a kilogram ($815-$816 a ton) compared with 7,465 rupiah yesterday. PT Kharisma Pemasaran Bersama Nusantara, which sells palm oil from state plantations, sold the entire 6,000 tons offered in Jakarta today. PT Astra Agro Lestari, the nation’s largest publicly traded plantation company, accepted bids for half of 3,000 tons of palm oil it auctioned. To contact the reporters on this story: Claire Leow in Singapore at cleow@bloomberg.net; Yoga Rusmana in Jakarta at yrusmana@bloomberg.net

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