MARKET DEVELOPMENT
Palm Holds Near 17-Month High as Malaysia Stockpiles May Shrink
Palm Holds Near 17-Month High as Malaysia Stockpiles May Shrink
26/02/2014 (Bloomberg) - Palm oil held near 17-month highs on speculation inventories in Malaysia may decline for a second month as output drops in the largest producer after Indonesia.
The contract for May delivery traded at 2,742 ringgit ($835) a metric ton on the Bursa Malaysia Derivatives compared with the 2,741 ringgit close yesterday in Kuala Lumpur. Futures climbed 7.2 percent this month.
Output dropped about 9 percent in the first 20 days of this month from the same period in January, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari Sdn. in Selangor, citing estimates from the Malaysian Palm Oil Association. The harvest is lowest in January and February each year due to growing cycles. Output fell for a third month to 1.51 million tons in January while reserves dropped to 1.93 million tons, according to the Malaysian Palm Oil Board.
“We expect lower inventories in February due to expected lower production,” Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., said by phone in Kuala Lumpur. Stockpiles may drop to 1.8 million tons, he said.
Exports from Malaysia increased 1.6 percent to 1.05 million tons in the first 25 days of this month from the same period in January, surveyor Intertek said today.
Soybean oil, an alternative to palm oil in food and fuel, for May delivery fell 0.2 percent to 40.97 cents a pound on the Chicago Board of Trade, while soybeans lost 0.2 percent to $13.7225 a bushel after reaching $13.78 yesterday, the highest since Sept. 13.
Refined palm oil for May delivery fell 0.8 percent to close at 6,112 yuan ($1,000) a ton on the Dalian Commodity Exchange. Soybean oil for September delivery declined 0.6 percent to 6,836 yuan.
The contract for May delivery traded at 2,742 ringgit ($835) a metric ton on the Bursa Malaysia Derivatives compared with the 2,741 ringgit close yesterday in Kuala Lumpur. Futures climbed 7.2 percent this month.
Output dropped about 9 percent in the first 20 days of this month from the same period in January, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari Sdn. in Selangor, citing estimates from the Malaysian Palm Oil Association. The harvest is lowest in January and February each year due to growing cycles. Output fell for a third month to 1.51 million tons in January while reserves dropped to 1.93 million tons, according to the Malaysian Palm Oil Board.
“We expect lower inventories in February due to expected lower production,” Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., said by phone in Kuala Lumpur. Stockpiles may drop to 1.8 million tons, he said.
Exports from Malaysia increased 1.6 percent to 1.05 million tons in the first 25 days of this month from the same period in January, surveyor Intertek said today.
Soybean oil, an alternative to palm oil in food and fuel, for May delivery fell 0.2 percent to 40.97 cents a pound on the Chicago Board of Trade, while soybeans lost 0.2 percent to $13.7225 a bushel after reaching $13.78 yesterday, the highest since Sept. 13.
Refined palm oil for May delivery fell 0.8 percent to close at 6,112 yuan ($1,000) a ton on the Dalian Commodity Exchange. Soybean oil for September delivery declined 0.6 percent to 6,836 yuan.