Palm oil rises on talk of India, China demand

CPO FUTURES

PALM oil gained yesterday on speculation that demand for the edible oil may remain strong in India and China, the world’s biggest users.

May-delivery palm oil futures advanced 0.2 per cent to RM2,635 a metric ton on the Malaysia Derivatives Exchange.

“Demand growth should remain strong given the projected gross domestic product growth of around 8-10 per cent for China and India,” CIMB Group Sdn Bhd said in a report yesterday.

Palm oil also gained as soybeans, crushed to make soybean oil, advanced for a second day.

May-delivery soybeans traded in Chicago advanced 0.2 per cent to US$9.71 a bushel at 6.49 pm in Singapore. May-delivery soybean oil was unchanged at 39.3 cents a pound at 6.46 pm.

In China, September-delivery palm oil rose 1.2 per cent to settle at 7,016 yuan (US$1,028) a ton on the Dalian Commodity Exchange, extending Monday’s 2.3 per cent jump. Soybeans rose 1.4 per cent to 3,874 yuan, after climbing 1.1 per cent on Monday.

Indonesia, the second-largest palm oil producer, may keep the export tax for March unchanged at 3 per cent, Sahat Sinaga, second deputy chairman of the nation’s palm oil board, said.

Palm oil, the cheapest cooking oil, is also used as an alternative fuel additive and tends to track crude oil prices. It surged 52 per cent last year as crude oil jumped 78 per cent.

Crude oil in New York for March delivery climbed to more than US$80 a barrel for a third day in Asian trading and was last at US$79.62 a barrel at 6.52 pm Singapore time.


RUBBER

MALAYSIAN rubber prices ended higher yesterday amid a quiet market despite weaker prices on the Tokyo Commodity Exchange.

The higher prices were due to concern over a tight supply condition, dealers said.

Many tappers have stopped tapping due to wintering, which is characterised by reduced yield owing to dry weather.

A dealer said the market was quiet due to lack of participants as more traders were still on the Lunar New year holiday mood.

At noon, the Malaysian Rubber Board's physical price for SMR 20 rose 4.5 sen to 1,046.5 sen per kg while latex in bulk edged up 5 sen to 734 sen per kg.

The unofficial sellers' closing price for tyre-grade SMR 20 decreased 1 sen to 1,045.5 sen per kg and latex in bulk added 0.5 sen to 734 sen per kg.


TIN

THE tin price on the Kuala Lumpur Tin Market (KLTM) rose by US$33 to close at US$16,933 per tonne yesterday amid expectations of strong demand from China, following the week-long Lunar New Year break and an improving economic outlook, dealers said.

The dealer said the KLTM also gained support in tandem with the overnight uptrend in the tin price on the London Metal Exchange (LME), which ended US$175 higher at US$17,175 per tonne.

"The tin markets received strong interest in anticipation of a better economic performance this year," added the dealer.

On the KLTM, overall turnover was flat at 50 tonnes.

Bids accounted for 50 tonnes compared with offers of 40 tonnes with European, Japanese and local traders continuing to dominate trade.

The price differential between the KLTM and the LME declined to a premium of US$95 per tonne from US$235 per tonne on Monday. - Agencies