Palm oil rallied to the highest in eight weeks on speculation rising shipments will deplete record reserves from this month.
The contract for March delivery rose 2.1 percent to 2,481 ringgit ($811) a metric ton on the Malaysia Derivatives Exchange, the highest settlement level for the most-active contract since Nov. 2. The rally pared the year’s loss to 22 percent.
Exports from Malaysia, the largest shipper after Indonesia, climbed 3 percent to 1.29 million tons in the first 25 days of December from the same period a month ago, Societe Generale de Surveillance said yesterday. Reserves in Malaysia reached an all-time high of 2.56 million tons last month.
“End stock should have peaked last month, that’s why we see palm prices adjusting higher,” said Ryan Long, vice president of futures and options at OSK Investment Bank Bhd. in Kuala Lumpur. “Export for the month has been encouraging and production is expected to be lower.”
Indonesia cut its export tax on shipments next month to 7.5 percent from 9 percent in December, while lowering the so-called base price for exports to $709 a ton, Bachrul Chairi, acting director general for foreign trade, said in a statement today. Malaysia has set its export-tax rate at zero for January.
Palm oil has advanced 12 percent since dropping to a three-year low of 2,217 ringgit on Dec. 13. The edible oil may be the best-performing agricultural commodity in 2013 as demand rebounds, according to Rabobank International.
Soybeans for March delivery climbed 0.4 percent to $14.2425 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March added 0.8 percent to 49.10 cents a pound.
Palm oil for May delivery rose 2.1 percent to close at 7,016 yuan ($1,125) a ton on the Dalian Commodity Exchange. Soybean oil for May gained 0.7 percent to 8,634 yuan a ton.