Palm-oil exports from Indonesia, the largest producer, will probably increase for a third month in September as rising output and a lower tax boost purchases of the commodity used in candy, soaps and biofuel. Prices dropped.
Shipments may advance to 1.6 million metric tons this month after gaining an estimated 1.4 percent to 1.4 million tons in August from July, according to the median estimates of five plantation executives in a Bloomberg News survey. While output may have dropped to 1.9 million tons last month from an estimated 2 million tons in July, it will rise to 2.1 million in September, four of the respondents said. The executives didn’t provide forecasts for inventories.
Palm oil in Malaysia, the benchmark price in the second- largest producer, has lost 7.8 percent this year even as soybeans in Chicago rallied to an all-time high on damage from a drought in the U.S. Stockpiles in Indonesia may total 4 million tons, twice as much typically estimated, according to Godrej International Ltd., which forecast a rise in Malaysian reserves to a record. That may cut prices and hurt profits at companies such as Golden Agri-Resources Ltd. (GGR), the second-biggest planter.
“September exports will gain because of lower duty,” said Joko Supriyono, secretary-general of the Indonesian Palm Oil Association. “Output will pick up as activities resume after the Eid al-Fitr holidays in August,” said Supriyono, who’s also a director at PT Astra Agro Lestari. (AALI) The association, which doesn’t issue stockpile and production figures, will release export data for August in the last week of this month.
Palm-oil futures dropped 0.7 percent to close at 2,927 ringgit ($941) a ton on the Malaysia Derivatives Exchange today, the lowest price at close since Aug. 16. Soybeans, crushed to produce a rival oil, reached a record $17.89 a bushel on the Chicago Board of Trade on Sept. 4. Soybean oil was $315.38 a ton more costly than palm, data tracked by Bloomberg showed.
Prospects for higher output and exports fueled gains in the shares of Indonesian palm oil companies today, said Hariyanto Wijaya, an analyst at PT Mandiri Sekuritas in Jakarta.
Astra Agro rose 1.5 percent to close at 19,900 rupiah in Jakarta, the most in a week. PT Sampoerna Agro (SGRO) gained 3.7 percent to 2,800 rupiah, the highest price at close since Aug. 28 and PT Perusahaan Perkebunan London Sumatra Indonesia (LSIP) climbed 2 percent to 2,500 rupiah.
Indonesia cut its tax on exports to 13.5 percent this month, the lowest rate this year, from 15 percent in August, Deddy Saleh, director general of foreign trade at the trade ministry, said Aug. 29. The base price was lowered to $918 a ton from $950.
The country’s exports rose 21 percent to 1.38 million tons in July, the highest level since April, the Indonesian Palm Oil Association said Aug. 28. That compared with the median estimate of 1.4 million tons in a Bloomberg survey on July 31.
Stockpiles in Malaysia probably climbed 7 percent to 2.14 million tons in August, the highest in 11 months, according to a Bloomberg survey published Sept. 5. Output rose 0.5 percent to 1.7 million tons and exports climbed 9.5 percent to 1.42 million tons, the survey of two analysts and three plantation companies showed. The Palm Oil Board releases the data on Sept. 10.
Gains in prices will be curbed because of the reserves, slower economic growth and rising output, Dorab Mistry, a director at Godrej International, told a conference in Singapore yesterday. The tropical oil may trade between 2,900 ringgit and 3,300 ringgit a ton this month and next, he said.
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