Dec. 28 (Bloomberg) -- Palm oil rose for a second week, reaching the highest level since the beginning of November, on optimism record inventories in Malaysia will decline as the low-production season reduces supplies and export taxes are cut.
The contract for March delivery climbed 0.6 percent to 2,497 ringgit ($816) a metric ton on the Malaysia Derivatives Exchange, the highest settlement level for the most-active price since Nov. 1. Futures added 3.7 percent this week, following a 5.9 percent gain the previous week, the best performance in a year.
Indonesia cut its tax on shipments in January to 7.5 percent from 9 percent this month, Bachrul Chairi, acting director general for foreign trade, said yesterday. Malaysia has set its export-tax rate at zero for January. Output in Malaysia, where reserves reached an all-time high of 2.56 million tons last month, typically declines over the first quarter.
The gain is driven by expectations “palm stocks will slowly ease due to the low-production cycle during the first quarter next year, and higher exports, especially to China, after a new tax implementation,” said Chandran Sinnasamy, head of trading at LT International Futures Sdn in Kuala Lumpur.
Palm oil has advanced 13 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 0.5 percent to $14.205 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March added 0.9 percent to 49.16 cents a pound.
Palm oil for May delivery dropped 0.7 percent to close at 6,964 yuan ($1,117) a ton on the Dalian Commodity Exchange. Soybean oil for May was little changed at 8,642 yuan a ton.
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