Palm oil, which traded at more than RM3,000 ringgit (US$963) a metric ton today for the first time since 2008, may extend its rally on increased Chinese demand and bullish technical signals, according to Phillip Futures Pte.

“The next hurdle is detected at the 3,330 level,” Ker Chung Yang, an investment analyst at Phillip Futures, wrote in an e-mail today.

Near-term and mid-term technical outlooks “are now aligned with a bullish bias,” Ker wrote.

The world’s cheapest and most-consumed edible oil has surged to the highest level since July 2008 on increased demand from China and India, the two largest buyers.

A rally in soybean-oil prices has also boosted the price of the tropical oil as the two are substitutes.

China’s imports of vegetable oils may rise this year, the China National Grain & Oils Information Center said in an e- mailed monthly forecast today. Imports of palm oil may rise by 700,000 metric tons to 6.5 million tons, it said.

January-delivery palm oil rose as much as 1.2 per cent to RM3,021 a ton on the Malaysia Derivatives Exchange, and was at RM2,999 at 12:30 pm in Kuala Lumpur. The most- active contract has surged 38 percent over the past year.

Dalian soybeans for May delivery soared as much as 2.3 per cent to 4,341 yuan (US$653) a ton today, heading for a fourth month of gains. Chicago soybeans are trading at US$12.275 a bushel, a gain of 11 per cent so far this month.

“As the uptrend of soybeans futures on the Dalian Commodity Exchange is showing no signs of pause, China is likely to continue its buying streak of Chicago soybeans,” Ker said. “Subsequently, crude palm oil will be lifted.”

China’s economy grew 9.6 per cent in the third quarter, beating forecasts, as inflation accelerated in September to a 23-month high, the country’s statistics bureau said today. China raised key interest rates two days ago.

Malaysia and Indonesia are the largest palm oil producers, representing about 90 percent of global output. – Bloomberg

Source: Business Times