CPO futures at new high on China buying spree
<mailto:> Published: 2008/02/19 There are no limits to where palm oil can go ... RM3,800, even RM4,000, says a trader with a leading plantation firm MALAYSIAN crude palm oil futures rose 1.3 per cent to a new high today as China hurried to lock in edible oil supplies after harsh winter weather damaged its oil seed crops. The benchmark May contract on the Bursa Malaysia Derivatives Exchange rose RM47 to a record RM3,646 (US$1,132) a tonne by 0741 GMT. China's buying spree saw exports of palm oil surging and sent prices of rival soyoil to new record peaks. Traders said China started buying in late January or early February after the cold snap destroyed nearly 40 per cent of its planted rapeseed crop. "There are no limits to where palm oil can go...RM3,800 ringgit, even RM4,000 ringgit," said a trader with a leading plantation firm. "Even at these price levels, palm oil is at a discount to soyoil and China is out to quickly replenish as cheaply as possible." Palm oil is the cheapest vegetable oil in the world, standing at an 18.4 per cent discount to soyoil, which trades at around US$1,391 per tonne at Rotterdam port, traders said. US soybean futures soared almost 20 cents per bushel to a record high today in Asian trade, following the extended rally in global oilseed and vegetable oil markets. Soyoil also hit a record high with the December contract rising nearly 1.8 per cent to 61.41 cents per pound by 0741 GMT. Exports of Malaysian palm oil products have surged in the first half of February by as much as 53 per cent to 603,389 tonnes, cargo surveyors reported. China accounted for roughly a fifth of the exports during the period. - Reuters
