PALM oil futures prices may rise for an eighth week in Malaysia, which produces half of the world's palm oil crop, because of falling estimates for the rival soybean harvest in Brazil.
Five out of nine traders, investors and producers polled in Kuala Lumpur and Jakarta said they would buy the commodity, which is crushed to make edible oil. Four recommended holding the contract.
Malaysia and Indonesia produce about 80% of the world's palm oil, the main rival to soybean oil exported by the US, Brazil and Argentina. Brazil, the world's second largest soybean producer, last week reduced its estimate for the crop by 13% to 50.2 million tons from 57.7 million tons in February.
Soybean production hasn't been up to expectations due to the weather,'' said David Ng, who owns oil palm plantations and trades the commodity in Kuala Lumpur. There's no reason why crude palm oil shouldn't rise.''
Palm oil futures for July delivery, the most active contract, rose RM14, or 0.8%, to RM1,888 on Friday on the Malaysia Derivatives Exchange. Palm oil is processed into cooking oil and so-called oleochemicals for the production of soap, shampoo and detergent.
Farm consulting firm Safras & Mercado said Brazil's 2003-2004 soybean harvest would be smaller than expected at 49.97 million tonnes because of bad weather and disease. Bloomberg