Dec. 12 (Bloomberg) -- Palm oil stockpiles in Malaysia, the world’s second-largest producer, climbed 8.3 percent in November from a month earlier.
Inventory of the edible oil increased to 2.27 million metric tons, the Malaysian Palm Oil Board said today. Output rose 0.4 percent to 1.66 million tons, while exports gained 1.1 percent to 1.35 million tons.
Malaysia and Indonesia, which together supply 90 percent of the world’s palm oil, are trying to trim output and stockpiles to reduce supplies and reverse tumbling prices. Palm oil, used for cooking and fuel, has plunged 56 percent in the past six months as commodity demand slows amid a global recession.
The February-delivery contract on the Malaysia Derivatives Exchange fell 2.4 percent to 1,604 ringgit ($450) a ton at the 12:30 p.m. break in Kuala Lumpur. It reached a record 4,486 ringgit in March.
Palm oil prices may reach 2,000 ringgit a ton next year as demand picks up, Malaysia’s Plantation Industries and Commodities Minister Peter Chin said last month.
The country will make transporters and power generators use palm-oil based biofuel by January 2010 to create extra demand for the commodity, Chin said on Dec. 10.
Palm oil and crude oil are Malaysia’s biggest agricultural exports, accounting for a combined 65.5 billion ringgit of exports in 2007, according to the country’s finance ministry.
To contact the reporters on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net
