Malaysian palm oil futures rose to a fresh 13-month high on Tuesday, as traders continued to make bullish bets on the edible oil after industry data showed healthy export demand and lower stocks. The widely watched Malaysia's palm oil stocks for March fell to a 7-month low as export growth outpaced production, industry regulator Malaysian Palm Oil Board said on earlier in the day.
Cargo surveyor data also pointed to higher exports for the first 10 days of April compared to a month ago as major importers including Europe, China and India ramped up buying. "The export jump is within expectations. There are a couple of reasons for the increase - first, China has increased purchases of palm oil in line with its overall vegetable oil purchases, and second, demand may return to palm oil in the biodiesel industry in Europe," said Alan Lim, research analyst with Malaysia's Kenanga Investment Bank.
Benchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange closed 1.1 percent higher at 3,621 ringgit ($1,178) per tonne. Prices went as high as 3,628 ringgit, a level not seen since March 8 last year. Traded volumes stood at 25,488 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.
Malaysia's palm oil stocks fell 5 percent in March to 1.96 million tonnes, against a revised 2.06 million tonnes in February. The fall exceeded market expectations in a Reuters poll for palm oil stocks to have fallen 3.5 percent to 1.99 million tonnes. "Lower stocks are going to be supportive for prices. This is the first time we are getting a meaningful drop below 2 million tonnes over the past few months," said a trader with a foreign commodities brokerage.
Malaysian palm oil exports recorded a monthly gain of 7.8 percent and 8.9 percent for the first 10 days of April, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance respectively. In other vegetable oil markets, the most active US soyoil contract for May edged up 0.6 percent while the most active Dalian soyoil September contract gained 0.5 percent.