Palm oil climbed for a second day on speculation that a plunge to the lowest price in more than three years last week and duty-free exports from Malaysia, the second-largest producer, will spur demand from importers.
The contract for February delivery, the most-active by open interest, gained 0.2 percent to close at 2,280 ringgit ($746) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur. The March-delivery contract, the most-active by volume, rose 0.2 percent to 2,350 ringgit. Futures lost 1 percent last week for a fourth weekly decline and are heading for a 28 percent drop this year, the worst annual loss since the financial crisis in 2008.
Palm oil, used in everything from instant noodles to soap bars, slumped 2,217 ringgit a ton on Dec. 13, the lowest price since November 2009, as output in Indonesia and Malaysia, the biggest producers, outpaced demand from China and India.
“Palm oil prices have become quite attractive because of the decline last week,” said Ryan Long, a vice president of futures and options at OSK Investment Bank Bhd. in Kuala Lumpur. “If prices stabilize in the next few days then buying will pick up from traditional markets such as China.”
Malaysia will allow crude palm oil exports at zero duty in January, the customs’ department said today. The existing rate is 23 percent. The average price for calculating the tax was set at 2,147.81 ringgit a ton for January, below the minimum threshold of 2,250 ringgit a ton for tax to be applied.
“Export demand will pick up gradually in the coming days, and may ease stockpiles a bit,” Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore. “The current price level is too low for producers.”
Stockpiles in Malaysia climbed 2.3 percent to an all-time high of 2.56 million tons in November from a month earlier, the nation’s palm oil board said Dec. 10. Inventories may climb to at least 2.7 million tons by Jan. 1, Dorab Mistry, a director at Godrej International Ltd., said on Nov. 30.
Soybeans for March climbed as much as 0.7 percent to $15.0125 a bushel, the highest price for the most-active contract since Nov. 8, on the Chicago Board of Trade. Soybean oil for delivery in March gained 0.5 percent to 50.65 cents a pound. Palm and soybean oils are both used in food and fuel.
Palm oil for May delivery rose 0.6 percent to end at 6,830 yuan ($1,095) a ton on the Dalian Commodity Exchange. Soybean oil for May rose 0.7 percent to close at 8,792 yuan a ton.