Palm oil advanced to the highest level in almost 18 months after production in Malaysia dropped to the lowest since April 2012, depleting stockpiles in the world’s second biggest supplier to an eight-month low.
The contract for May delivery gained 0.7 per cent to RM2,905 (US$885) a metric tonne on Bursa Malaysia Derivatives, the highest level at close since September 2012. Price rose 3.1 per cent last week, posting a fifth weekly advance, the longest run since June.
Inventories fell 14 per cent to 1.66 million tonnes from a month earlier, the lowest level since June, the Malaysian Palm Oil Board said today. This was the biggest drop since February 2009. The median of estimates in a Bloomberg survey was 1.8 million tonnes for reserves. Output fell 15 per cent to 1.28 million tonnes, while exports lost 1.3 per cent to 1.35 million tonnes, the lowest since July 2012, board data shows.
“The data is good for prices because stockpile and production data came in lower than expectations,” Hariyanto Wijaya, an analyst at PT Mandiri Sekuritas, said by phone from Jakarta. Output may be lower due to the lagged effects of a drought in May to June last year, he said.
Refined palm oil for September delivery declined 0.4 per cent to close at 6,418 yuan (US$1,045) a tonne on the Dalian Commodity Exchange. Soybean oil dropped 0.5 per cent to end at 7,160 yuan.
Soybean oil for delivery in May gained 0.5 per cent to 44.54 cents on the Chicago Board of Trade, while soybeans fell 0.4 per cent to US$14.515 a bushel.– Bloomberg
Source : New Straits Times