MALAYSIAN
crude palm oil futures ended off one-week highs yesterday, as China
unveiled plans to restock agriculture commodities at a time when erratic
weather globally may curb supplies.
US soyoil for January
delivery hit a 28-month high during Asian trade, as prospects of
growing China demand extended gains in a market already rising on
higher biofuel mandates in South America.
China said
Wednesday it will take a bigger role in importing food staples to shore
up reserves of soybeans and corn, which has boosted grains and spilled
over to vegetable oil markets.
Big buyers such as China are moving in at a time when hot weather may
curb soy and corn production in South America and rains have started
limiting palm oil output in Malaysia and Indonesia.
“The
weather story now includes a China story, which will see gains across
most the of the agricultural complex,” said a trader with a foreign
commodities brokerage.
“The cold weather in the US is also lifting commodities indirectly via crude oil’s rally above US$90 a barrel.”
Benchmark
March 2011 crude palm oil futures on the Bursa Malaysia Derivatives
ended up 1.1 per cent at RM3,658 after going as high as RM3,676, a
level unseen since December 15.
Traded volumes stood at 17,660 lots of 25 tonnes each compared to the usual 10,000 lots.
Palm oil is set for its best weekly
performance in December, as investors are increasingly favouring
agricultural commodities as an inflation hedge since food prices in
China and India have been high.
Source : Business Times
