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News Admin
 
Date
 10/04/2007
News Provider
 Mahamad Rodzi Abdul Ghani
News Source
 The Financial Express
Headline
 Palm oil climbs to 8-yr high on likely shortfall in supplies

3/4/07  (The Financial Express)  -  Palm oil futures rose to the highest in more than eight years on concern global supplies of cooking oil will lag behind demand led by China and India.
The commodity has risen 34% in the past six months while competing soybean oil has gained 36% as soybeans lose acreage to corn, increasingly grown to meet surging demand for ethanol as an alternative fuel. Soybean oil and palm oil are the world’s most consumed edible oils.

“Output will clearly be impacted and lead to supply shortages,” said Michael Greenall at BNP Paribas Capital (Malaysia) in Kuala Lumpur. “Soybean oil is up and palm oil is moving in tandem.” Palm oil for June delivery, the most active contract, rose as much as 37 ringgit, or 1.8%, to 2,098 ringgit ($606) a tonne on the Malaysia Derivatives Exchange. That is the highest since January 15, 1999 when it touched 2,105 ringgit. The contract traded at 2,096 ringgit at the close of the morning session.

Farmers will reduce US soybean planting by 11% to 67.1 million acre, more than the 8.4% drop estimated by analysts, the US Department of Agriculture said March 30.

Corn planting will rise 15% to 90.4 million acre because demand for ethanol makes the crop more profitable, USDA said. Soy oil for May delivery fell 0.3% to 32.66 cents a pound.

—Bloomberg

ECONOMICS & INDUSTRY DEVELOPMENT DIVISION
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