BLBG: Palm Oil Climbs to Two-Month High as Crude Oil Holds Above $82
By Yoga Rusmana
March 8 (Bloomberg) -- Palm oil advanced to its highest level in two months as crude oil held above $82 a barrel, increasing palm’s appeal as a feedstock for biodiesel, and as Indonesia and Malaysia agreed to tackle environmental issues.
The May-delivery contract gained as much as 1.3 percent to 2,704 ringgit a metric ton on the Malaysia Derivatives Exchange, the highest price for the most active month since Jan. 6, before trading at 2,697 ringgit at 4:27 p.m. in Kuala Lumpur.
Crude oil for April delivery added 0.7 percent to $82.03 a barrel amid speculation improving world demand and OPEC supply restrictions will help slow growth in stockpiles. The contract traded as high as $82.41 a barrel earlier today.
“Crude increased sharply in the last two days” supporting palm oil prices, said Merlissa Paramitha Trisno, an analyst with PT Mandiri Sekuritas. “A move by Indonesia and Malaysia to team up to counter the negative campaign against palm oil also added some support to the market.”
Indonesia and Malaysia agreed on March 5 jointly to tackle environmental and labor issues that threaten the development of the industry, the Jakarta Globe reported today, citing the Indonesian Agriculture Minister Suswono.
Unilever said Dec. 11 that it suspended purchases from the Sinar Mas Group, Indonesia’s biggest palm oil producer, until the company can prove that its plantations aren’t contributing to deforestation. “People are hoping such an agreement will definitely help reduce the negative campaign,” Trisno said.
To contact the reporter on this story: Yoga Rusmana in Jakarta at yrusmana@bloomberg.net
