March 1 (Bloomberg) -- Palm oil inventory held at ports in China, the second-biggest importer, expanded to a record last month driven by slow growth in demand and after the biggest-ever purchases in December, according to a Bloomberg survey.
Shipments stored at large ports rose to 1.4 million metric tons from 1.2 million tons in January, according to the median of a survey of three researchers and one trader yesterday. Buyers in China may slow purchases further to absorb the supply that’s accumulated, they said. A separate estimate today from researcher Grain.gov.cn put the reserves at 1.22 million tons.
The inventory in China adds to a glut in the world’s most-used cooking oil, which is caught in a bear market as supply expands to the biggest ever. Reserves in Malaysia, the largest producer after Indonesia, reached an all-time high in December. Futures in Kuala Lumpur fell for an eighth day today, poised for the worst run since 2006.
“China’s imports have been excessive, and we have yet to see a pickup in demand,” said Chen Kai, an analyst at Shanghai Pansun Information & Technology Co., a Shanghai-based oilseed researcher. “Prices may continue to weaken.”
Most-active crude palm futures fell 1.2 percent to end at 2,368 ringgit ($763) a ton on the Malaysia Derivatives Exchange for a 28 percent decline in the past year. Refined palm was at 6,608 yuan ($1,062) a ton on the Dalian Commodity Exchange, down 20 percent in the past 12 months.
The latest reserves estimate from state-owned Grain.gov.cn, a unit of the China National Grain & Oils Information Center, is 130,000 tons higher than a week ago and compares with 1.12 million tons on Feb. 1. The year-ago figure was 870,000 tons.
Imports in December, when traders took earlier shipments to avoid stricter quarantine inspections from Jan. 1., surged to a record 954,087 tons, 46 percent higher than November, according to customs data. January’s imports were 472,733 tons.
China’s imports from Malaysia slumped 15 percent to 246,290 tons in February from a month earlier, according to data from surveyor Societe Generale de Surveillance yesterday. Total exports from Malaysia declined 8.8 percent, the data show.
Global stockpiles will gain to a record 7.203 million tons this season, according to the U.S. Department of Agriculture. Output in Malaysia will total 18.9 million tons in 2013, matching the biggest-ever crop in 2011, the Malaysian Palm Oil Board forecasts. Indonesia may harvest a record 30 million tons, Derom Bangun, chairman of that nation’s board, said on Feb. 18.
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