BLBG:Palm Oil May Drop on Speculation Stockpiles to Climb in Malaysia
Palm oil is poised to decline on speculation that stockpiles in Malaysia, the largest producer after Indonesia, may increase this month from September’s record as exports may not be enough to cut reserves.
The contract for January delivery, which has the largest open interest and volume, was little changed at 2,463 ringgit ($811) a metric ton on the Malaysia Derivatives Exchange at 4:20 p.m. in Kuala Lumpur after swinging between gains and losses. The most-active contract has lost 22 percent this year, touching a three-year low this month as demand faltered and reserves rose.
Inventories rose to 2.48 million tons last month, according to the Malaysian Palm Oil Board. Dorab Mistry, a director of Godrej International Ltd., has forecast an increase to 3 million tons or more on Jan 1. Shipments from Malaysia rose 13 percent to 769,534 tons in the first 15 days of October from 680,112 tons in same period last month, surveyor Intertek said Oct. 15.
“Inventories remain high,” Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd., said from Mumbai. “Until and unless you see these inventories getting off from Malaysia’s table, you won’t see any positive momentum.”
Although edible-oil demand in India was expected to pick up during the festival season, the local soybean harvest could meet that demand, said Mallya. The second-most populous country has several religious festivals this month and Diwali in November.
India’s crude palm oil imports climbed 32 percent to 722,754 tons in September, while refined purchases fell 22 percent to 111,163 tons, the Solvent Extractors’ Association of India said Oct. 15.
Soybean oil for December delivery gained 0.4 percent to 50.65 cents a pound on the Chicago Board of Trade. Soybeans for November delivery were little changed at $14.9475 a bushel.
Palm oil for January delivery lost 0.6 percent to close at 6,884 yuan ($1,101) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in May dropped 0.3 percent to end at 9,188 yuan a ton.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
