Palm Oil Fluctuates on Speculation Chinese Imports Set to Slow

Palm oil swung between gains and losses on concern that imports by China, the second-biggest buyer, may expand at the slowest pace in three years.

The contract for delivery in January fell and rose at least 0.2 percent and was at 2,438 ringgit ($766) a metric ton on the Bursa Malaysia Derivatives at 12:10 p.m. in Kuala Lumpur. Futures closed yesterday at 2,437 ringgit, the highest price for most-active futures since Sept. 6. Palm for physical delivery in November was at 2,420 ringgit yesterday, data compiled by Bloomberg show.

China’s inbound shipments in the 12 months that began Oct. 1 are likely to remain about the same as the 6.6 million tons bought last year, according to a Bloomberg survey. Rising purchases of soybeans that are crushed to produce feed meal are also boosting the nation’s vegetable oil output at the expense of palm from exporters including Indonesia and Malaysia, Leon Xia, an analyst at Shanghai JC Intelligence Co., said yesterday.

“Malaysian palm oil is quite dependent on exports to China,” said Arhnue Tan, an analyst with Alliance Investment Bank Bhd. “If there is any slowing of exports, that could mean a build-up of supplies in Malaysia.”

Malaysia exported 17.6 million tons of palm oil last year, about 20 percent of which went to China, data from the Malaysian Palm Oil Board shows. World output will advance 5 percent to 58.1 million tons, boosting stockpiles by 17 percent to an all-time high of 9.2 million tons, according to the U.S. Department of Agriculture.

Refined palm oil for May delivery declined 0.4 percent to 6,132 yuan ($1,006) a ton on the Dalian Commodity Exchange and soybean oil retreated 0.7 percent to 7,208 yuan.

Soybeans for delivery in January lost 0.3 percent to $12.97 a bushel on the Chicago Board of Trade, while soybean oil for December fell 0.2 percent to 41.57 cents a pound.

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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