Crude palm oil futures prices on Malaysia's derivatives exchange rose 2.1% Monday, prices ending above MYR2,300 a metric ton for the first time in more than two months, as investors covered short positions due to higher exports and stronger crude oil prices in Asia.
The new benchmark February contract on the Bursa Malaysia Derivatives ended MYR48 higher at MYR2,336 a ton, after trading in a range of MYR2,305-MYR2,359/ton.
For the past two months, CPO futures have mostly traded between MYR2,020 and MYR2,280/ton.
Prices moved higher in the afternoon session after the New York Mercantile Exchange crude oil rose more than $1 to an intraday high of $77.56 a barrel in trading on Globex. At 0950 GMT, light, sweet crude for December delivery was trading $1.09 higher at $77.44 a barrel.
"Both soyoil and crude oil have been trading higher during Asian trading hours and this, along with higher exports, sustained prices above MYR2,300 levels," said a vegetable oil importer in Malaysia.
Cargo surveyor Intertek estimated Malaysia's palm oil exports in the first 15 days of November up 13% from the same period last month at 674,148 tons.
Another surveyor, SGS (Malaysia) Bhd., estimated Nov. 1-15 exports up 21% at 717,936 tons.
The rise in exports of palm oil and palm oil products was attributed mainly to buying by exporters of crude palm oil. CPO exports rose 53%-72% on month, according to the data from the surveyors.
European and Chinese buyers stepped up purchases of palm oil products as "a depressed BMD market made prices very attractive to buyers," an executive from Kuala Lumpur-based trading company said. "Palm exports to the E.U. are up on rising industrial (oleochemicals) demand for the commodity."
Intertek estimated exports to the E.U. at 189,864 during the Nov. 1-15 period, up 17.3% from a month earlier. SGS put shipments to China at 199,890 tons, up from 140,331 tons.
"The (palm oil) export demand may be sustainable and it is likely exports may match October's figures or rise higher," a Kuala Lumpur-based cash broker said.
November exports are likely to rise to 1.47 million-1.52 million tons, she said.
Cargo surveyors put October exports at 1.42 million-1.43 million tons.
In other news, India's vegetable oil imports in the marketing year ended Oct. 31 rose 37% to record high of 8.66 million tons, the Solvent Extractors' Association of India said Monday. Total edible oil imports were also up 46% at 8.18 million tons, it said.
A rise in per capita consumption, a zero-percent duty on crude edible oil and a nominal duty on refined oil helped imports rise significantly, the association said. Imports had surprisingly not declined even during the peak domestic crushing season, and averaged nearly 2 million tons per quarter.
India, a major palm oil buyer, bought 5.2 tons of CPO in 2008-09 compared with 4 million tons a year earlier. Refined, bleached and deodorized palm olein imports rose to 1.2 million tons from 730,794 tons.
In the cash market, cash palm olein for November traded at $702.50-$707.50/ton, December at $710/ton, January/February/March at $730/ton and April/May/June at $735/ton, free on board Malaysian ports, a Singapore-based trader said.
Cash CPO for prompt shipment was offered MYR90 higher at MYR2,290/ton.
A total of 19,503 lots of CPO were traded on the BMD versus 12,876 lots Friday.
Open interest stood at 94,729 lots Monday, down from 96,400 lots. One lot is equivalent to 25 tons.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Dec 09 2,311 2,255 Up 56 2,327 2,270 Jan 10 2,325 2,269 Up 56 2,340 2,285 Feb 10 2,336 2,288 Up 48 2,359 2,305 Mar 10 2,345 2,303 Up 42 2,369 2,318
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;shie-lynn.lim@dowjones.com
(Debiprasad Nayak in Mumbai contributed to this article)
(END) Dow Jones Newswires
November 16, 2009 05:49 ET (10:49 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.
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