Palm Oil Climbs to Highest
in More Than Eight Years on Exports
By Feiwen Rong
April 16 (Bloomberg) -- Palm
oil futures rose to the highest in more than eight years on concern that supply
may lag behind demand following estimates of higher-than-expected exports from
Malaysia, the world's largest producer of the commodity.
Malaysia exported 29 percent more palm oil during April 1-15 than a
month earlier, according to estimates by independent cargo surveyor Societe
Generale de Surveillance. A total of 642,492 metric tons of bulk palm oil
shipments through Malaysian sea ports were tracked, compared with 496,977 tons
of palm oil in the same period last month, SGS said.
``The exports are very strong and palm oil futures are responding to
that,'' Francis Lee, trader at Okachi (Malaysia) Sdn Bhd, said by phone from
Kuala Lumpur today.
Palm oil for June delivery, the most active contract, rose as much as
88 ringgit, or 4 percent, to 2,307 ringgit ($671) a ton on the Malaysia
Derivatives Exchange. That's the highest since Dec. 1, 1998, when it touched
2,311 ringgit. The contract traded at 2,270 ringgit at 5:15 p.m. local time.
Earlier today, another independent cargo surveyor Intertek Malaysia
said the country's palm oil exports rose 47 percent in April 1-15 to 666,793
tons from 454,791 tons a month ago.
Lower import taxes by India, the world's second-biggest vegetable oil
buyer, may also bolster gains in palm oil prices in Malaysia and soybean oil in
Chicago.
India last week reduced import duty on edible oils for the third time
this year to boost supplies and slow inflation.
India Tax
Import tax on crude palm oil was reduced to 50 percent from 60
percent, while duty on refined bleached and deodorized palm oil was cut to 57.5
percent from 67.5 percent, Hema Ambika Priya, a spokeswoman at the Central
Board of Excise and Customs in the Finance Ministry said April 13 in New Delhi.
India imports palm oil from Malaysia and Indonesia, which produce 85
percent of the world's supply of the tropical oil.
Futures prices were off their intraday high as some investors deemed
the rally too fast, Vince Ng, an analyst at Kaf- Seagroatt and Campbell Bhd.,
said by phone from Kuala Lumpur today. Investors shouldn't read too much into
the 15-day exports figure, Ng added.
``Most of the time, when you see a strong pickup in the first half of
the month you might see exports die down in the second half of the month,'' Ng
said. ``These are all estimates done at the port, so timing of the shipment is
always an issue.''
Exports in the first half of the month can be ``a good indication of
how strong the exports are'', but investors still need to ``bear in mind that
cumulative exports in the first three months are a more important indicator,''
Ng said.
Palm oil futures rose in the past six months partly because of a rally
in the soybean oil market, Ng said. ``In the past few days palm oil has become
stronger than soyoil and the trend might get reversed, because I don't think
it's time for palm oil to lead soyoil yet.''
Soybean oil futures have gained 32 percent in the past six months,
while palm oil has soared 45 percent.
To contact the reporter on this story: Feiwen Rong in Singapore at
[EMAIL PROTECTED]
Last Updated: April 16, 2007 05:24 EDT
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