Palm oil rallied to the highest level in more than three months on speculation that Malaysian stockpiles will drop from a record as a zero export tax lures buyers away from Indonesia, the world’s largest producer.
The contract for delivery in April gained 1.9 percent to 2,557 ringgit ($823) a metric ton on the Malaysia Derivatives Exchange, the highest price at close for the most-active contract since Oct. 25. Futures climbed 4.9 percent in January, the biggest monthly advance since March.
Exports from Malaysia climbed 11 percent to 1.46 million tons in January from a year earlier, according to data from surveyor Intertek today. Malaysia will maintain the zero-tariff policy for a second month in February to help clear stockpiles of the oil used in foods and fuels, while Indonesia, the biggest producer, will raise taxes on crude exports to 9 percent for February from 7.5 percent, the Trade Ministry said Jan. 28.
“The zero export duty for crude palm oil should help Malaysian shipments,” Alvin Tai, an analyst at OSK Investment Bank Bhd., said by phone in Kuala Lumpur. The pick-up in exports, and an expected double-digit drop in production this month, will help reduce the stockpiles, he said.
While Malaysia’s exports fell 7 percent in January compared with December, the extent of the drop narrowed as the month progressed, Intertek data showed. In the first 15 days, exports were down 21 percent. Shipments dropped 6.4 percent to 1.42 million tons in January, according to Societe Generale de Surveillance. Inventories reached a record 2.63 million tons at the end of December, according to the Malaysian Palm Oil Board. Output is typically lowest in January and February.
Refined palm oil for delivery in September gained 1.5 percent to 7,176 yuan ($1,154) a ton on the Dalian Commodity Exchange, the highest close since Oct. 25. Soybean oil for delivery in the same month rose 1 percent to 8,820 yuan a ton.
Soybeans for March delivery lost 0.6 percent to $14.7025 a bushel on the Chicago Board of Trade, while soybean oil for March delivery was little changed at 52.54 cents a pound.