12//6/07 (Business Times)  -  PALM oil stockpiles in Malaysia, the world's second-largest grower, fell 6.1 per cent in May compared with April, extending a three-year low, according to monthly data issued yesterday by the Malaysian Palm Oil Board.

Stockpiles last month fell to 1.12 million tonnes, the board said. That is the lowest since May 2004. Exports rose 2.2 per cent to 1.15 million tonnes in May compared with the previous month, while output advanced 6.7 per cent to 1.2 million tonnes.

Demand for palm oil is surging, especially in China and India, the world's two most populous nations.

The price of the commodity, used in foods, as cooking oil and as alternative fuel, has gained 70 per cent over the past year. Malaysia and Indonesia account for about 90 per cent of global output.

Palm oil for August delivery on the Malaysia Derivatives Exchange gained RM16, or 0.7 per cent, to RM2,487 a tonne at 12.30pm local time, before the release of the board's monthly snapshot.

The contract, which reached a record RM2,764 on June 6, gained as much as 2.1 per cent earlier. - Bloomberg