KUALA LUMPUR: Palm oil futures headed for their highest close in almost seven months on expectations of a decline in stockpiles in second-biggest producer Malaysia and increased buying by India in the coming weeks.

The South Asian country, the cooking oil’s biggest importer, will celebrate several festivals in October and November.

Edible oil consumption generally rises during the festive season as people eat more sweets and fried food.

“Exports may be increasing as Indian buyers may start stocking up for Deepavali in November, ” said Christopher Andre Benas, analyst at RHB Sekuritas in Jakarta.

There are also expectations that Malaysia’s inventory may decline, he added.

Still, gains are likely to be capped Tuesday after data showed that exports from Malaysia, the world’s second-biggest grower, dropped about 15% from a month earlier to 1.48 million tons in August, according to cargo surveyor AmSpec Agri.

Shipments dropped 13%, data released by Intertek Testing Services showed.

Palm for November delivery on Bursa Malaysia Derivatives rises as much as 2.3% to RM2,800/ton, before trading at RM2,792 by midday break; -8.5% YTD.

Soybean oil for December in Chicago +0.9% to 33.16c/lb.

Palm for December on Asia Pacific Exchange in Singapore Derivatives little changed at US$674.75/ton

Refined palm oil for January on Dalian Commodity Exchange +0.2% at 5,866 yuan/ton

Soybean oil for January +0.2% at 6,700 yuan/ton

Soybean oil’s premium over palm ~$58/ton vs average of $67 in past year: data compiled by Bloomberg

Palm’s premium over gasoil ~$310/ton vs avg of ~$142 in past year. – Bloomberg

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