KUALA LUMPUR: Malaysian palm oil futures inched up on Thursday, tracking gains in crude markets, but uncertainty over global appetite for the vegetable oil and prospects of a faster-than-expected recovery in weather-hit yields kept prices range-bound.

An improved view on global crude demand saw oil rise above $62 a barrel on Thursday after comments from Saudi Arabia’s oil minister lifted Brent futures 5 per cent on Wednesday, helping both Brent and US crude to record their largest percentage gain in nearly two weeks.

Higher oil prices could tempt biodiesel producers to begin blending palm oil into biofuels again, after the rout in crude wiped out blending margins.

The benchmark May contract on the Bursa Malaysia Derivatives Exchange had gained 1.25pc to 2,276 ringgit ($635) per tonne. Traded volume stood at 44,048 lots of 25 tonnes each, above the usual 35,000 lots.

The Malaysian Palm Oil Association, a group of planters, on Wednesday forecast crude palm oil output in the No.2 grower rose 4.5pc between Feb 1-20, lifted by a recovery in Peninsular Malaysian estates.

Published in Dawn, February 27th, 2015

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