Palm oil rebounded on speculation that stockpiles in Malaysia, the second-largest producer, may decline further this month as exports improve on the back of a zero tax on shipments compared with a levy in Indonesia.
The contract for April delivery advanced as much as 1.1 percent to 2,532 ringgit ($820) a metric ton on the Malaysia Derivatives Exchange, and traded at 2,510 ringgit at 11:50 a.m. in Kuala Lumpur. Futures dropped the most in more than six weeks yesterday as reserves in January fell less than expected, according to data from the Malaysian Palm Oil Board.
Shipments from Indonesia, the largest grower, may slump to the lowest level in four months in February as more buyers turn to Malaysia after it extended duty-free shipments to clear record stockpiles. Exports will drop 5.6 percent to 1.51 million tons from January, according to the median of estimates from three plantation companies, one analyst and one refiner compiled by Bloomberg. Indonesia fixed the duty at 9 percent this month.
“Our pricing for February is no doubt more competitive” than Indonesia,” said Ryan Long, vice president of futures and options at OSK Investment Bank Bhd. in Kuala Lumpur. “So far, we have seen good export numbers from the surveyors, so I believe end-stocks for February will be lower again. Exports for February will be good -- as good as January, or even better.”
In the first 10 days of this month, exports from Malaysia rose 18 percent to 440,830 tons from the same period in January, Intertek said Feb. 9. Shipments surged 25 percent in the first 10 days, Societe Generale de Surveillance said yesterday.
Last month, inventories slid 1.9 percent to 2.58 million tons from 2.63 million tons, the board said yesterday. The drop was less than expected. Output fell 10 percent to 1.6 million tons, while exports slid 1.6 percent to 1.62 million tons.
Soybean oil for May delivery declined 0.5 percent to 51.85 cents a pound on the Chicago Board of Trade.
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