Palm oil exports from Indonesia, the world’s largest producer, will probably climb 13 percent this month to the highest level since January as lower prices and taxes spur importers to boost purchases.
Shipments are set to increase to 1.6 million metric tons from an estimated 1.41 million tons in October, according to the median of estimates from three plantation executives, an analyst and a refiner compiled by Bloomberg. Output will decline to 2.4 million tons from 2.43 million tons, the survey showed. Stockpiles may drop to 2.5 million tons from 2.6 million tons, three respondents said.
Palm oil, used in everything from soap to biofuels, has lost 27 percent this year as the global economic slowdown hurt demand while increased production in Indonesia and Malaysia, the two biggest growers, boosted reserves. Prices need to drop further in the next few weeks to attract buyers and clear inventories, which are at a record in Malaysia, according to Dorab Mistry, director at Godrej International Ltd.
“Some traders will boost purchases, hoping that prices rebound,” said Teguh Patriawan, president director at Jakarta-based planter PT Nusantara Sawit Persada. He expects shipments to total at least 1.5 million tons this month.
Palm oil for January delivery fell 0.6 percent to 2,323 ringgit ($759) a ton on the Malaysia Derivatives Exchange today. Most-active prices dropped to 2,230 ringgit on Oct. 3, the lowest since November 2009. Futures need to fall to 2,200 ringgit, Mistry said yesterday, reiterating a forecast.
Shipments from Indonesia may rise after the government cut the tax on exports of the crude variety to 9 percent this month from 13.5 percent in October, said Susanto, head of marketing at the Indonesian Palm Oil Association, known as Gapki.
The tax on crude palm oil this month is the lowest since October 2010, when it was 7.5 percent, according to data compiled by Bloomberg. The duty on refined, bleached and deodorized, or RBD, palm olein was halved to 3 percent, while that on RBD palm oil was reduced to zero from 4 percent.
Exports from Indonesia dropped 2.1 percent to 1.38 million tons in September as India and China reduced purchases, Gapki said on Oct. 29. Shipments to India, the biggest buyer, declined 9.5 percent to 507,460 tons and purchases by China fell 8 percent to 205,730 tons, association data showed.
Figures for exports last month have not been issued. The estimate of 1.41 million tons was the median from a Bloomberg survey of four plantation executives, a refiner and an analyst published on Oct. 8. Projected exports in November would be the highest since January, when they were 1.64 million tons, according to Gapki data.
Global vegetable-oil reserves are at a record and palm and lauric oil stockpiles will keep expanding until December, Mistry said at a conference in China yesterday. Indonesian exporters may be shipping “substantial” cargoes to Malaysia to benefit from higher prices there, said Mistry, who’s worked in the industry for 35 years.
Stockpiles in Malaysia reached a record 2.48 million tons in September after surging 46 percent from June, according to data from the Malaysian Palm Oil Board, which is set to release figures for October on Nov. 12. A Bloomberg survey published on Nov. 6 showed that stockpiles in Malaysia may have expanded further last month, reaching 2.7 million tons.