Rise in palm oil price reflects high demand

Palm oil advanced for a third day as demand for the tropical oil, used in food and biofuels, was seen rising amid tightening supply of competing vegetable oils. October-delivery palm oil gained as much as 1.1 per cent to 3,025 ringgit (Dh3,700) a tonne on the Malaysia Derivatives Exchange and closed at 3,015 ringgit a tonne in Kuala Lumpur. The most-active contract fell for a third week, losing 1.2 per cent. India, the world's largest palm oil buyer, may boost imports to a record, gaining 10 per cent to about 7 million tonnes in the year ending October 31 from a year ago, as rising incomes boost demand for processed food, according to a Bloomberg News survey of five processors and analysts. "If their local crop is having some problems, they would need to import more," driving prices higher, Donny Khor, a senior vice-president for futures and options at OSK Investment Bank, said by phone from Kuala Lumpur yesterday.