BLBG:Palm Oil Gains as Inventories May Drop on Increasing Exports
Palm oil climbed for a second day to the highest level in more than a week on speculation that a rebound in demand will boost exports from Malaysia, reducing inventories in the world’s largest producer after Indonesia.
The contract for delivery in June advanced as much as 1 percent to 2,438 ringgit ($781) a metric ton on the Malaysia Derivatives Exchange, the highest price for the most-active contract since March 12, and was at 2,434 ringgit at 3:53 p.m. in Kuala Lumpur. Futures tumbled 28 percent in the past year.
Exports from Malaysia gained 11 percent to 927,665 tons in the first 20 days of this month from 835,612 tons in the same period in February, surveyor Intertek said today. Inventories dropped to 2.44 million tons in February from an all-time high of 2.63 million tons in December, according to the Malaysian Palm Oil Board. Malaysia maintained a 4.5 percent tax on shipments of crude palm oil for a second month in April.
“When prices are more attractive there’ll be some buyers coming into the market,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. “The tax for April is the same so there’s really no rush for them to push something out ahead of April.”
Palm prices may be near a bottom as demand increases in part as supplies of soybean oil tighten, Oil World said yesterday. Exports of soybean oil, which like palm can be used in cooking and biofuel, from the top three shippers slumped 23 percent in February from a year earlier, the Hamburg-based researcher said, referring to Argentina, Brazil and the U.S.
Soybean oil for May delivery climbed 0.5 percent to 49.71 cents a pound on the Chicago Board of Trade, while soybeans for May gained 0.6 percent to $14.1575 a bushel. Soybean oil was about 1.4 times costlier than palm.
Refined palm oil for September delivery advanced 0.2 percent to close at 6,344 yuan ($1,021) a ton on the Dalian Commodity Exchange. Soybean oil ended little changed at 8,100 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
