Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Palm Oil Advances Most in Three Weeks as Reserves Seen Dropping

Jan. 22 (Bloomberg) -- Palm oil rallied the most in almost three weeks on expectations that zero-rate export taxes will cut record stockpiles in Malaysia, the second-biggest producer.

The contract for delivery in April climbed 1.9 percent to 2,465 ringgit ($810) a metric ton on the Malaysia Derivatives Exchange, the biggest gain at close for the most-active contract since Jan. 2. Futures have climbed 1.1 percent this year.

Inventories will drop 16 percent to 2.2 million tons by March after tariffs were reduced to zero this month, according to the median of six analyst and trader estimates compiled by Bloomberg, published today. Futures will rally to 2,800 ringgit by the end of this quarter, the median of 13 estimates shows. The country will maintain the zero tariff on crude shipments through February to draw down the stockpiles, which stood at an all-time high of 2.63 million tons in December.

“Since February’s export tax still remains zero, it’s likely to attract more CPO exports,” said Donny Khor, associate director for futures and options at OSK Investment Bank Bhd. in Kuala Lumpur, referring to crude palm oil by its initials. This should reduce the reserves, he said.

Production in January may be about 16 percent to 17 percent lower than the 1.78 million tons a month earlier and February’s output is expected to decline further, said Khor. Production is usually at its lowest in the first two months of the year.

Since Plantation Industries and Commodities Minister Bernard Dompok announced on Jan. 14 that there would no tax on shipments next month, palm has advanced 4 percent. Exports of palm oil products to India may increase even after the biggest consumer imposed a tax on crude palm imports, Dompok said today.

Refined palm oil for delivery in May rose 1 percent to close at 6,818 yuan ($1,096) a ton on the Dalian Commodity Exchange. Soybean oil for September closed little changed at 8,848 yuan a ton.

Soybeans for March delivery gained 1.2 percent to $14.4675 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March climbed 1.5 percent to 52.46 cents a pound.

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.