Palm oil exports from Indonesia, the world’s largest producer, jumped to the highest level in at least five years in February after China and Pakistan boosted purchases to benefit from a slump in prices.
Shipments, including palm and kernel oils, gained 9.1 percent to 2.04 million metric tons from 1.87 million tons in January, according to data from the Indonesian Palm Oil Association e-mailed today. That’s the most in a month at least since 2008, according to the earliest available data from the association compiled by Bloomberg, and it beat the median estimate in a Bloomberg survey of 1.51 million tons.
Rising exports may help trim Indonesian stockpiles and halt a 34 percent decline in prices in Kuala Lumpur in the past year. Indonesia’s inventories of the tropical oil used in everything from noodles to biofuels dropped 14 percent to 3 million tons in February from a month earlier, according to a Bloomberg survey published Feb. 14.
“It seems that exporters were able to adapt to the new imports rule in China that had caused some concern in January,” said Fadhil Hasan, executive director at the growers’ group, known as Gapki. Demand for Lunar new year festival in February also boosted shipments, he said.
China imposed more stringent rules on edible oil imports to improve food-safety standards with effect from Jan. 1 and Indonesia’s exports to the Asian country fell 15 percent in January. Shipments jumped 108 percent to 370,110 tons in February and sales to Pakistan surged 80 percent to 149,850 tons, Gapki data showed. Exports to India, the world’s largest buyer, fell 13 percent to 699,770 tons and sales to European Union dropped 22 percent to 305,120 tons, the data showed.
Futures in Kuala Lumpur, the global benchmark, fell 6.3 percent in February, the most since September. The contract for delivery in June fell as much as 1.5 percent to 2,360 ringgit ($767) a ton on the Malaysia Derivatives Exchange today.
Palm oil and its by-products accounted for 93 percent of Indonesia’s total February shipments, or 1.9 million tons, and the remainder was palm kernel oils, the data showed. Exports in the first two months of the year rose 29 percent to 3.9 million tons from a year earlier, Gapki data showed.
To contact the editor responsible for this story: James Poole at firstname.lastname@example.org