Palm oil gained for the first time in three days as its discount to soybean oil, a substitute in food and fuel, and prices at a two-week low boosted demand.
The contract for April delivery climbed as much as 1 percent to 2,521 ringgit ($814) a metric ton on the Malaysia Derivatives Exchange, before trading at 2,520 ringgit at 12:22 p.m. in Kuala Lumpur. That’s paring what will likely be a weekly decline after closing at 2,495 ringgit yesterday, the lowest price for most-active futures since Jan 29.
Prices may strengthen in the first half of this year as stockpiles in Malaysia, the largest producer after Indonesia, may shrink to about 2 million tons on seasonally lower production, export tax changes and a wide discount to soybean oil, Ong Chee Ting and Chai Li Shin, analysts at Maybank Investment Bank Bhd., wrote in a report today. Soybean oil’s premium over palm was at $335.43 a ton today, compared with a five-year average of $182.46, data compiled by Bloomberg show. Read the full article here
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