Palm Oil Extends Rally to 5-1/2-Month High

Malaysian palm oil futures jumped 1.7% to above MYR 4,500 per tonne, extending solid gains from the prior session and hitting their highest in 5-1/2 months. A weaker ringgit and higher palm olein prices on the Dalian exchange boosted sentiment. Meanwhile, signs of robust exports mounted, with cargo surveyors noting shipments rose between 6.5% and 21.3% from a month earlier in the first 15 days of August. In top buyer India, demand is set to recover in August and September as buyers stock up ahead of the mid-October Diwali festival. This comes after July imports slumped 10.5% following a steep hike in crude palm oil and refined palm olein duties to 19.25% from 8.25%. In China, another major consumer, authorities pledged targeted support for the economy after weak July activity data. Still, further gains were capped by bets of higher Malaysian output, with industry data showing July production up 7.1% to 1.81 million tons and stocks at a near 2-year high of 2.11 million tons.