Palm Oil Closes Near One-Month High on Improved Demand Prospects

(Bloomberg) – Palm oil closed near a one-month high on improved demand prospects ahead of Ramadan, with data from a surveyor showing that shipments from Malaysia dropped at a slower pace.

The contract for August delivery ended little changed at 2,335 ringgit ($775) a metric ton on the Bursa Malaysia Derivatives. Futures closed at 2,336 ringgit on May 17, the highest price at close since April 12.

Export demand from the Middle East and South Asia usually climbs before the Muslim fasting month, when communal meals boost total consumption. While shipments from the second-largest producer fell 9.4 percent to 799,405 tons in first 20 days of May from a month ago, according to Intertek, that’s less than the 17 percent drop over 10 days. Exports fell 6.6 percent to 807,232 tons, Societe Generale de Surveillance said. Ramadan starts in July.

“There is lot of expectation that demand may improve because of Ramadan,” Ivy Ng, an analyst at CIMB Investment Bank Bhd., said by phone from Kuala Lumpur. “The decline in exports from Malaysia has narrowed from early part of the month, and this is because of a pickup in demand.”

Refined palm oil for September delivery fell 0.5 percent to end at 6,046 yuan ($985) a ton on the Dalian Commodity Exchange, while soybean oil closed little changed at 7,480 yuan. On the Chicago Board of Trade, soybeans for July delivery rose 0.3 percent to $14.525 a bushel and soybean oil for the same month little changed at 49.51 cents a pound.