Palm oil traded near the highest level in almost a month on speculation that stockpiles in Malaysia, the world’s second-biggest producer, may decline as output drops and exports increase.
The contract for delivery in June rose as much as 1 percent to 2,480 ringgit ($796) a metric ton on the Malaysia Derivatives Exchange, the highest price for the most-active contract since Feb. 25, before trading at 2,458 ringgit at 12:20 p.m. in Kuala Lumpur. Futures are set to gain 1.8 percent this week.
Exports from Malaysia gained 14 percent to 922,987 tons in the first 20 days of this month from the same period in February, Societe Generale de Surveillance said March 20. Inventories dropped to 2.44 million tons in February from an all-time high of 2.63 million tons in December, according to the Malaysian Palm Oil Board. Production slumped 19 percent to 1.3 million tons last month, palm oil board data show.
“If production is lower in March, it will be the sixth month of continuous decline,” Chandran Sinnasamy, head of trading at LT International Futures Sdn., said by phone from Kuala Lumpur. “This will bring down the stocks sharply in the next one to two months.”
The gains in exports will also contribute to the decline in inventories, Chandran said.
Soybean oil for May delivery dropped 0.3 percent to 50.26 cents a pound on the Chicago Board of Trade, while soybeans for May fell 0.6 percent to $14.41 a bushel.
Refined palm oil for September delivery was little changed at 6,414 yuan ($1,032) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month lost 0.5 percent to 8,106 yuan a ton.
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