Palm oil climbed to the highest in more than seven months, extending the best annual gain in 12 years, as gains in crude oil prices increased its appeal as a substitute used in biofuels.
Palm oil rallied 56 per cent last year on rising demand from India and China, the top consumers, and amid tight supplies of soybean oil because of drought in South America. Oil surged 78 per cent in 2009, the biggest annual advance in a decade, and soybean oil rose 21 per cent.
“In 2010, the world will come to appreciate the crucial role of palm oil in the supply equation of vegetable oils,” Dorab Mistry, a director at Godrej International said today. He had forecast on December 15 that palm oil will reach 2,800 ringgit to 3,000 ringgit by the end of March. Godrej is one of India’s biggest importers of vegetable oils.
March-delivery palm oil gained as much as 1.2 per cent to 2,696 ringgit ($788) a metric ton on the Malaysia Derivatives Exchange, highest since May 15 in intra-day trading. It traded at 2,690 ringgit at 5:13 pm local time.
Crude oil for February delivery in New York gained as much as 1.3 per cent to $80.39 a barrel. Oil hasn’t closed above $80 since November 4. Vegetable oils, which are used as biofuels, track movements in crude.
