Palm oil advanced for a second day on speculation that shipments from Malaysia, the second-largest producer, will rise this month as exporters boost sales before a tax increase in March.
The contract for delivery in May climbed 1.2 percent to close at 2,566 ringgit ($828) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures have gained 5.3 percent this year after a 23 percent slump in 2012.
Malaysia will raise the duty on shipments of the crude variety to 4.5 percent in March from zero in January and February, according to the Customs Department. Indonesia may keep the rate unchanged at 9 percent next month, said Steaven Halim, an official at the Indonesian Palm Oil Association. The country is the biggest palm oil supplier.
“There has been some encouragement to push for more exports before March,” Josephine Goh, a trader at OSK Investment Bank Bhd., said by phone from Kuala Lumpur. “Some element of sentiment play will keep prices supported ahead of the general elections.”
Prime Minister Najib Razak must dissolve parliament by April 28 for an election to be held within 60 days. Exports rose 18 percent to 673,555 tons in the first 15 days of February from the same period a month earlier, surveyor Intertek said Feb. 15.
The Malaysian government said in October it would reduce the export tax from January to drain record stockpiles. Reserves slid 1.9 percent to 2.58 million tons last month from an all-time high of 2.63 million tons in December, the nation’s palm oil board said Feb. 13. Indonesia’s inventories will probably shrink 14 percent to 3 million tons this month, according to estimates compiled by Bloomberg.
Refined palm oil for delivery in September gained 0.9 percent to close at 7,118 yuan ($1,140) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month climbed 0.7 percent to end at 8,710 yuan a ton.
Soybeans for May delivery advanced 1.7 percent to $14.3825 a bushel on the Chicago Board of Trade. Soybean oil rose 1 percent to 52.51 cents a pound.