Palm oil advanced to the highest level in more than five weeks on speculation that stockpiles in Malaysia will shrink as production declines in the world’s second-biggest supplier.
Palm oil for April delivery gained 0.9 percent to 2,634 ringgit ($793) a metric ton on the Bursa Malaysia Derivatives, the highest level at close for the most-active contract since Jan. 3. The advance trimmed losses this year to 0.9 percent.
Inventories dropped 2.6 percent in January to 1.93 million tons from a month earlier, the lowest level since October, the Malaysian Palm Oil Board said this week. Stockpiles may decline further this month if production remains unchanged and exports improve, according to Chee Tat Tan, an analyst at Phillip Futures Pte.
“The stockpiles coming in lower-than-expected have been supporting the market coupled with gains in the other oilseeds,” said Faiyaz Hudani, an associate vice president at Kotak Commodity Services Ltd., by phone from Mumbai. “The expectation is there could be a further drawdown in stockpiles because of lower output.”
Palm oil imports by India, the world’s biggest buyer, probably plunged 26 percent in January as farmers prepared to collect the largest winter oilseed crop in three years, a Bloomberg survey showed. Shipments of the main crude and refined oils tumbled to 650,000 tons in January from a year earlier, according to the survey. The Solvent Extractors’ Association of India will release the data this week.
Soybeans for delivery in March were little changed at $13.335 a bushel on the Chicago Board of Trade, while soybean oil rose 0.3 percent to 38.95 cents a pound.
Refined palm oil for May delivery gained 0.8 percent to end at 5,886 yuan ($971) a ton on the Dalian Commodity Exchange. Soybean oil advanced 0.4 percent to 6,644 yuan.
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