KUALA LUMPUR, May 22: Malaysian crude palm futures closed higher on Tuesday as a supply squeeze and steady exports supported the market.
Dealers said market players were closely watching crude oil, which traded over $70 a barrel as violence in Nigeria heightened worries of further supply disruption.
The benchmark August contract finished up 13 ringgit at 2,375 ringgit ($701) a ton. Buyers are looking for crude palm oil supplies when there is not much available in the market,” said one dealer. Coupled with good exports, the market is slowly moving up.
The crude oil market might be a factor in the days to come because once it goes past $70 a barrel, the biodiesel story comes alive again, said another dealer.
The palm oil market has gained around 19 per cent this year after surging 40 per cent in 2006 on demand from the biodiesel and food sectors.
Other traded months rose between 4 and 35 ringgit in overall trade of 8,052 lots of 25 tons each.
Exports of Malaysian palm oil products for May 1-20 fell 3.7 Per cent to 775,979 tons from 806,154 shipped between April 1 and 20, according to cargo surveyor Intertek Testing Services.
Another surveyor, Societe Generale de Surveillance, said exports during the period rose 1.3 per cent to 799,579 tons from 789,644 shipped between April 1 and 20.
In the physical market, crude palm oil for May shipment in the southern region was quoted at 2,530/2,540 ringgit a ton. Trades were done at 2,530 ringgit.—Reuters
