Palm oil climbed the most in almost a week after a decline to a two-week low boosted the outlook for the tropical oil’s use in biofuels.
The contract for April delivery gained as much as 0.9 percent to 2,552 ringgit ($768) a metric ton on the Bursa Malaysia Derivatives, the biggest jump for most-active futures since Jan. 23. Palm was at 2,544 ringgit at the midday break, halting a three-day 2.8 percent drop. Prices fell to 2,519 ringgit yesterday, the lowest since Jan. 15.
Edible oil shortages in India and Africa are set to climb to records, while biodiesel mandates in Indonesia and Malaysia should increase domestic use, raising global palm oil demand by 10 percent this year from 2013, Thilan Wickramasinghe, an analyst at HSBC Plc, said in a report dated yesterday. India is the world’s top importer of palm oil, while Indonesia and Malaysia are the two-biggest producers.
“Lower prices boost biodiesel appeal,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. Some buyers may also be rebuilding their stockpiles after the decline in prices in the past few days, she said.
Soybean oil for March delivery was unchanged at 37.40 cents a pound on the Chicago Board of Trade, while soybeans fell 0.3 percent to $12.8175 a bushel.
Refined palm oil for May delivery gained 0.9 percent to 5,712 yuan ($943) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month increased 0.5 percent to 6,468 yuan.
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