Jan. 8 (Bloomberg) -- Palm oil dropped to the lowest level in more than two weeks after a report that buyers in China, the largest consumer of cooking oil, built the biggest-ever stockpiles before the country tightened rules on imports.
The contract for March delivery fell 1 percent to 2,393 ringgit ($786) a metric ton on the Malaysia Derivatives Exchange, the lowest price at close for the most-active contract since Dec. 20. Prices fell for the fourth straight day.
With effect from Jan. 1, China imposed more stringent rules on edible oil imports to improve food-safety standards. Palm oil inventory at major ports in China climbed to a record 1.1 million tons as of yesterday, the China National Grain & Oils Information Center said in a report today. Malaysia’s palm oil reserves reached an all-time high in November. Official data on holdings in December are scheduled on Jan. 10.
“Demand from China may be lower in January,” Benny Lee, market strategist at Jupiter Securities Sdn., said by phone in Kuala Lumpur. As total sales have also slowed, inventories in Malaysia may expand further, said Lee.
Stockpiles in Malaysia were 2.53 million tons in December compared to the record 2.56 million tons a month earlier, according to the median of estimates from six analysts and two plantation companies in a Bloomberg survey published yesterday.
China’s imports from Malaysia jumped 24 percent to 866,340 tons in November and December last year from 698,000 tons in the same period in 2011, according to data from Societe Generale de Surveillance, or SGS. Total shipments from Malaysia fell 7.9 percent to 1.52 million tons in December, SGS said on Dec. 31. SGS and Intertek are scheduled to give estimates for exports for the first 10 days of January on Jan. 10.
Palm oil for May delivery lost 1.7 percent to close at 6,844 yuan ($1,099) a ton on the Dalian Commodity Exchange. Soybean oil for May fell 0.3 percent to end at 8,660 yuan a ton.
Soybeans for March delivery dropped 0.5 percent to $13.8125 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March lost 0.2 percent to 49.86 cents a pound.
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