KUALA LUMPUR, Feb 22: Malaysian palm oil futures surged to record highs for the seventh consecutive session on Friday on hopes China will buy more palm oil to replenish its vegetable oil reserves.
Traders also built up positions ahead of next week’s industry gathering where experts such as Dorab Mistry, James Fry and Thomas Mielke will present their forecasts and views on palm oil, which has gained more than 20 per cent since the start of 2008.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange rose 18 ringgit to a record 3,720 ringgit ($1,157) a ton. The contract then settled 4 ringgit lower at 3,698 ringgit.
The usual strategy is to take profit after numerous record highs. But this happened only for a moment and then players were back because there are just too many bullish factors to consider, said a head trader with a foreign brokerage.
With the way these price outlooks for palm oil go, it’s bound to be positive and no one wants to miss the boat for more profits. Other traded months ranged between a rise of 25 ringgit to declines of 30 ringgit .
Overall trade slipped to 7,295 lots of 25 tons each from the usual 10,000 lots. Bursa Malaysia will hold the annual palm oil conference from February 25-27.
Already booming on European demand, a flood of investments into commodity markets and Jakarta’s plans to hike export taxes, palm oil is expected to rise even further on talk that India will slash import duties, traders said.
China demand for Malaysian palm oil has started to come in, although it is European buying that has underpinned much of the surge in exports, data from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed.
Exports of Malaysian palm oil products for February 1-20 jumped by roughly a third to more than 750,000 tons, the cargo surveyors said.
In Malaysia’s physical market, crude palm oil for February shipment in the southern region was quoted at 3,690/3,700 ringgit a ton. Trades were dones between 3,685 and 3,700 ringgit.