By Claire Leow Dec. 22 (Bloomberg) -- Palm oil futures in Kuala Lumpur gained for the first time in three days after Malaysian exports advanced in the first three weeks of the month, stoking speculation that record stockpiles could decline. Palm oil shipments from Malaysia, the second-largest producer, jumped 31 percent in the first 20 days of the month to 1.1 million metric tons compared with the same period the previous month, surveyor Intertek said today. Crude oil, which can lead palm oil prices, gained as much 2.6 percent. “If exports keep going up, the inventory will come down much faster, and that will be a boost for prices,” said Ong Chee Ting, a plantation analyst at Aseambankers Malaysia Bhd. “We’re entering a low production period for palm oil,” Ong said, referring to a seasonal dip in output. March-delivery palm oil rose as much as 3.8 percent to 1,595 ringgit ($458) a ton, a five-day high, on the Malaysia Derivatives Exchange after losing 3.4 percent last week. The contract stood at 1,588 ringgit at the 12:30 p.m. break. Malaysian exports gained in November for a second month, reaching 1.35 million tons, according the nation’s palm oil board. Still, stockpiles climbed to a record 2.27 million tons that month, the board said. Palm oil futures have slumped two-thirds from a record 4,486 ringgit a ton in March as the global recession cut demand. The commodity now trades at a 35 percent discount to soybean oil, from 6.1 percent on March 31, according to Bloomberg data. Soybean oil traded in Chicago gained 2 percent to 31.54 cents a pound at 12:19 p.m. Singapore time in after-hours trading. It gained as much as 3.3 percent earlier. Chinese Surge Soybeans, soybean oil and palm oil for May delivery traded on the Dalian Commodity Exchange in China, the largest consumer of vegetable oils, rose by the daily trading limit on concern the government may boost purchases to support prices. Soybeans gained 5 percent to 3,216 yuan ($470) a ton, the highest intraday level since Nov. 28. Soybean oil rose as 5 percent to 6,014 yuan a ton and Dalian palm oil rose to 4,906 yuan a ton. China is the world’s largest consumer of palm oil, a cheaper alternative to soybean oil. “There’s speculation that the government may boost reserve purchases to support prices,” Chen Baomin, analyst at Jilin Grain Group Co., said today by phone from Dalian. Palm oil trading in the next few weeks will be volatile, Aseambankers’ Ong said. “Unless crude oil regains some strength, vegetable oils are trading higher than crude oil, so biodiesel isn’t attractive,” denting demand for palm oil, he said. Crude oil traded in New York gained today on speculation OPEC’s production cuts next month and U.S. economic stimulus plans will reduce global stockpiles. Vegetable oils are used as feedstock for alternative fuels. To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net

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