KUALA LUMPUR: Palm oil gained on speculation that exports from Malaysia will expand ahead of the Muslim fasting season of Ramadan, further trimming inventories in the world’s second-largest producer from an 11 month-low.
The contract for August delivery climbed as much as 0.5 percent to RM2,464 (US$784) a metric ton on the Bursa Malaysia Derivatives, and was at RM2,459 at 11:25 a.m. in Kuala Lumpur. Palm for physical delivery in June was at RM2,420 yesterday, according to data compiled by Bloomberg.
Stockpiles dropped 5.1 percent to 1.82 million tons in May, the least since June 2012, the Malaysian Palm Oil Board said yesterday. Output increased 1.3 percent to 1.38 million tons last month, while exports declined 3 percent to 1.41 million tons, board data showed. Shipments from Malaysia gained 10 percent to 419,035 tons in the first 10 days of June from a month ago, Intertek said yesterday.
“We expect more positive export data over June and July from pre-festive season stocking activities,” Arhnue Tan, an analyst at Alliance Investment Bank Bhd., wrote in a report today.
“Inventories will likely hover around the 1.8 million ton levels or lower come June.”
Demand typically picks up ahead of Ramadan, which falls in July this year, when Muslims break day-long fasts with communal meals, and the Eid festival in August. Palm oil imports by India, the world’s largest buyer, probably jumped to 750,000 tons in May, the highest in three months, as local supplies fell amid expanding demand, according to the median of estimates from five processors and brokers compiled by Bloomberg.
Soybean oil for July gained 0.3 percent to 48.19 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November traded little changed at $13.18 a bushel. — BLOOMBERG
Source : Business Times