KUALA LUMPUR: Crude palm oil futures advanced to the highest level in more than two weeks, buoyed by a recovery in demand from top buyers India and China, which may reduce global stockpiles.
Prices advanced for a fifth day and have climbed almost 8% this week.
At 3pm, CPO for third month delivery was up RM48 to RM2,936 per tonne, the highest since Sept 22.
Futures are also supported by dry weather in Brazil, which threatens the soybean crop and is bolstering prices of rival soybean oil.
“Sentiment has been underpinned by good demand and prospects of higher exports to China and India, ” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. Weather concerns in Brazil are adding to this, he said.
India’s palm oil imports are seen rising to 8.85 million tons in 2020-21 from 8 million tons a year earlier, Thomas Mielke, chief executive officer of Oil World, said in an online seminar Thursday.
Palm oil prices will depend entirely on the performance of Indonesia’s biodiesel mandate to blend 30% of palm-biofuel with 70% diesel, known as B30, according to veteran analyst Dorab Mistry, a director at Godrej International.
Palm’s premium over gasoil has surged in recent months, making mandatory biodiesel programmes much more expensive to run.- Bloomberg
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