03/12/2011 (Bloomberg) - Palm oil declined on speculation that stockpiles may have increased in Malaysia, the second-largest producer, after exports fell last month.

The February-delivery contract dropped as much as 0.8 percent to 3,035 ringgit ($970) a metric ton on the Malaysia Derivatives Exchange before closing the morning session at 3,044 ringgit in Kuala Lumpur. Futures are down 0.8 percent this week, heading for a second weekly drop.

Exports from Malaysia fell 8.8 percent to 1.53 million tons in November from the previous month, surveyor Intertek said Nov. 30. Shipments dropped 8.7 percent to 1.54 million tons, Societe Generale de Surveillance said on the same day.

There is a “possibility that stock levels in Malaysia will rise further due to weak exports for the month of November,” Arhnue Tan, vice president at Alliance Research Sdn., said by e- mail today.

Inventories of the most-consumed cooking oil fell 1.6 percent to 2.1 million tons in October from a month earlier, the Malaysian Palm Oil Board said Nov. 10. The board is due to release data for November on Dec. 12.

Losses would be capped as demand is expected to pick up from India, the largest palm oil user, said Rajesh Modi, a trader at Singapore-based Sprint Exim Pte.

MMTC Ltd. invited bids to import as much as 40,000 tons of refined, bleached and deodorized palm oil to ease a shortage, India’s biggest state-run trading company said on Nov. 28.

January-delivery soybeans increased as much as 0.6 percent to $11.35 a bushel on the Chicago Board of Trade. Soybean oil for delivery in the same month was little changed at 49.68 cents per pound.

Palm oil for delivery in May dropped 0.5 percent to 7,934 yuan ($1,253) per ton on the Dalian Commodity Exchange and soybean oil for the same month shed 0.4 percent to 8,802 yuan.