Palm oil up for fourth day on forecast of lower Feb stocks, Ramadan buying

• The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed up 22 ringgit, or 0.88%, to 2,517 ringgit ($605.41).

KUALA LUMPUR: Malaysian palm oil futures rose on Thursday for the fourth straight session, bolstered by forecasts of a decline in February inventories that has led to short covering and an uptick in demand ahead of Ramadan.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed up 22 ringgit, or 0.88%, to 2,517 ringgit ($605.41).

Traders are covering some of their short positions anticipating a fall in February stockpile, a Kuala Lumpur-based trader said.

Malaysian palm oil inventories in February likely dropped 1.4% to 1.73 million tonnes from 1.76 million tonnes in January, their lowest since June 2017, according to a Reuters' poll.

Palm oil surged 5% on Wednesday as importers stocked up ahead of the Muslim holy month of Ramadan that is scheduled to start on April 23.

Despite a slump in February exports, the market is optimistic that demand would increase this month because of Ramadan, traders said.

Typically, demand for palm oil picks up a couple of months before the Ramadan festivities as importers stock up on the edible oil in anticipation of increased food consumption.

"Recent reports of rising (coronavirus) cases outside China have led to concerns of slower global growth and weaker demand for commodities, leading to weaker prices," Ivy Ng, regional head of plantations research at CGS-CIMB, said in a note to clients.

Elsewhere, Dalian's most-active soyoil contract traded 1.5% higher, while its palm oil contract jumped 3.8%. Soyoil prices on the Chicago Board of Trade slid 0.13%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Meanwhile, the ringgit, palm's currency of trade, firmed 0.5% against the dollar, making the tropical oil costlier for foreign buyers.