Palm oil rises on solid demand ahead of Ramazan

Malaysian palm oil futures rose on Monday, climbed for their third consecutive session, on expectations of solid demand ahead of Ramazan. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed 0.8 percent higher at 2,600 ringgit ($599.77) per tonne. Traded volumes stood at 59,572 lots of 25 tonnes each by closing.
The benchmark contract gained 2.8 percent last week, snapping three straight weekly declines. "We see good demand - at least for April and then May also," a Kuala Lumpur trader said, adding that buyers from the Middle East were stocking up ahead of the Muslim holy month of Ramazan. The month of Ramazan will start later this month.
"It is actually soaking up a lot of the supply which is there in the spot market," the trader said, referring to the demand from the Middle East. Meanwhile, some traders have been betting since last week that April palm production could be lower than expected and that would push prices higher, said another Kuala Lumpur-based trader. Malaysian palm oil production in April likely climbed nearly 9 percent to its highest in six months, according to a Reuters poll of planters, traders and analysts. In other related vegetable oils, soyabean oil on the Chicago Board of Trade was 0.4 percent higher, while the September soyabean oil contract on the Dalian Commodity Exchange was up 1.27 percent. The September contract for palm olein was up 2.76 percent.