Palm oil climbed for the second day on speculation that worsening soybean crop conditions in the US may boost demand for the tropical oil.
The October-delivery contract gained as much as 0.6 per cent to 3,138 ringgit (Dh3,909) a metric tonne on the Malaysia Derivatives Exchange, and was trading at 3,135 ringgit by 4:25 p.m. in Kuala Lumpur. Futures were also boosted by a weaker dollar and expectations of stronger demand next month.
"Prices are gaining because of the weather conditions in the US," Ivy Ng, an analyst at CIMB Investment Bank, said by phone from Kuala Lumpur.
An estimated 62 per cent of the soybean crop in the world's biggest exporter was in good or excellent condition as of July 24, compared with 64 per cent a week earlier and 67 per cent a year ago, the US Department of Agriculture said on July 25. A weak US currency also helped "as people switch out of the dollar into commodities and other assets on uncertainty over the US debt issue", Ng said.
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India, the second biggest importer of cooking oil, may import 6.6 million metric tonnes of palm oil in the year ending October, up 3.4 per cent from the previous year, Sandeep Bajoria, chief executive officer of Sunvin Group, said on July 5.