Palm set for best run since Nov

 

CPO FUTURES

PALM oil advanced yesterday, poised for the longest rally in more than two months, on speculation that stockpiles in Malaysia may have declined.

April-delivery futures rose 0.４ per cent to close at RM2,561 ringgit a metric ton on the Malaysia Derivatives Exchange. The most-active contract rose for a sixth day, the longest gain since the period to November 18, 2009, according to Bloomberg data.

Reserves in Malaysia, the second-largest producer, may fall in January from December’s 2.24 million tons, according to Ben Santoso, an analyst at DBS Vickers Securities (Singapore) Pte Ltd and Ryan Long, a futures trader at OSK Investment Bank Bhd.

The Malaysian Palm Oil Board releases January data today.

Palm oil prices are expected to rise to RM2,800 to RM3,000
a ton this year because of stronger demand, Lee Shin Cheng, executive chairman at IOI Corp, Malaysia’s second- biggest listed producer, said yesterday.

“The prospect is good, demand is there,” Lee said. “Some of the countries, the economy has already stabilised and they will consume more. Countries like China, India, and Korea are increasing their crude palm oil” usage, he told reporters.

Exports from Malaysia surged 24 per cent to 1.48 million tons last month, led by orders from China, Pakistan and India, Societe Generale de Surveillance, a surveyor, said February 1. The gain was 28 per cent to 1.5 million tons, surveyor Intertek said.

Production peaked in October, according to data from the Malaysian Palm Oil Board. Oil palms typically produce less in the first half of the year.

Palm competes with the oil crushed from soybeans for use in food and biofuel and often tracks price movements.

Palm oil prices “will likely hold near current levels” due to food demand from China and India, and on demand for bio- diesel, ratings agency Fitch said in an e-mailed report yesterday.

Crude oil in New York reversed earlier losses, rising 1.1 per cent to US$72.45 a barrel at 6.11 pm.

Volatility in crude oil prices will limit gains for palm oil, which may trade between RM2,400 and RM2,800 a ton this quarter, DBS Vickers’s Santoso said on Monday.

In China, the largest edible oils user, palm oil for September delivery in Dalian ended 0.1 per cent lower at 6,776 yuan (US$991) a ton and Dalian soybeans also finished little changed at 3,809 yuan a ton.


RUBBER

MALAYSIAN rubber prices closed mixed in quiet trading yesterday as most players stayed away ahead of Chinese New Year celebrations starting this weekend, dealers said.

They said the players were reluctant to take heavy positions as most of them were already in holiday mood.

At noon, the Malaysian Rubber Board's official physical price for SMR 20 fell one sen to 996.5 sen per kg from Monday's 997.5 sen while latex-in-bulk rose 4.5 sen to 691 sen per kg from 686.5 sen previously.

The unofficial sellers' closing price for SMR 20 increased three sen to 998.5 sen per kg from 995.5 sen on Monday while latex-in-bulk was unchanged at 691.5 sen per kg.


TIN

THE tin price on the Kuala Lumpur Tin Market (KLTM) closed firmer yesterday on strong demand from both local and foreign players, dealers said.

The price of the commodity went up US$5 to US$15,400 a tonne.

On the London Metal Exchange (LME), the price of the metal, however, declined by US$300 to US$15,200 per tonne.

At the opening level on the KLTM, bids stood at 50 tonnes with offers at 40 tonnes. Total turnover was higher at 40 tonnes from Monday's 35 tonnes.

The price differential between the KLTM and LME widened to a premium of US$535 per tonne from US$230 per tonne previously. - Agencies