Palm Oil Gains as Record India Imports May Cut Malaysia Reserves

Palm oil climbed for the first time in six days on speculation that stockpiles in Malaysia may drop from a near record as India, the world’s biggest importer, boosts purchases to an all-time high this year.

The contract for May delivery advanced as much as 0.8 percent to 2,439 ringgit ($787) a metric ton on the Malaysia Derivatives Exchange, before trading at 2,434 ringgit at 12:17 p.m. in Kuala Lumpur. Futures lost 5.7 percent in the five sessions through yesterday, erasing this year’s gains.

India’s cooking oil purchases in the year through October are set to exceed the 9.98 million tons it bought in 2011-2012 as demand outstrips supply, according to Atul Chaturvedi, chief executive officer of Adani Wilmar Ltd., the country’s second- biggest importer. Demand will expand 6 percent to 17.5 million tons this year, said B.V. Mehta, executive director of the the Solvent Extractors’ Association of India.

“Production is expected to drop in Malaysia, so there is a good chance we will see some draw-down in stockpiles, and any demand from India will be another plus point,” Chung Yang Ker, an analyst with Phillip Futures Pte, said by phone from Singapore. “Futures were a bit oversold after five consecutive sessions of decline and we can see some bargain hunting.”

Stockpiles in Malaysia were 2.58 million tons in January, near the record 2.63 million tons in December, according to the nation’s palm oil board said. While production fell 10 percent, it was still 24 percent higher than the same month last year.

Soybean oil for May delivery was little changed at 49.38 cents a pound on the Chicago Board of Trade. Its premium to palm oil narrowed to $305.64 a ton today from $307.95 yesterday. They are the most consumed oils. Soybeans for May delivery dropped 0.4 percent to $14.2675 a bushel.

Refined palm oil for delivery in September rose 0.3 percent to 6,722 yuan ($1,079) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month was little changed at 8,306 yuan a ton.

To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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