Breaking News

Shots Fired at Canada War Memorial, Soldier Down
Tweet TWEET

Palm Oil Climbs to Eight-Week High as Stockpiles Seen Falling

Palm oil rose for a second week, reaching the highest level since the beginning of November, on optimism record inventories in Malaysia will decline as the low- production season reduces supplies and export taxes are cut.

The contract for March delivery climbed 0.6 percent to 2,497 ringgit ($816) a metric ton on the Malaysia Derivatives Exchange, the highest settlement level for the most-active price since Nov. 1. Futures added 3.7 percent this week, following a 5.9 percent gain the previous week, the best performance in a year.

Indonesia cut its tax on shipments in January to 7.5 percent from 9 percent this month, Bachrul Chairi, acting director general for foreign trade, said yesterday. Malaysia has set its export-tax rate at zero for January. Output in Malaysia, where reserves reached an all-time high of 2.56 million tons last month, typically declines over the first quarter.

The gain is driven by expectations “palm stocks will slowly ease due to the low-production cycle during the first quarter next year, and higher exports, especially to China, after a new tax implementation,” said Chandran Sinnasamy, head of trading at LT International Futures Sdn in Kuala Lumpur.

Palm oil has advanced 13 percent since dropping to a three- year low of 2,217 ringgit on Dec. 13. The edible oil may be the best-performing agricultural commodity in 2013 as demand rebounds, according to Rabobank International.

Soybeans for March delivery climbed 0.5 percent to $14.205 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March added 0.9 percent to 49.16 cents a pound.

Palm oil for May delivery dropped 0.7 percent to close at 6,964 yuan ($1,117) a ton on the Dalian Commodity Exchange. Soybean oil for May was little changed at 8,642 yuan a ton.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.