Palm shipments from Indonesia advanced in September for the first time in four months on reduced supplies of substitutes, boosting demand for the most-consumed cooking oil from the world’s biggest producer.
Exports gained 11 percent to 1.64 million metric tons from 1.48 million tons in August, the Indonesian Palm Oil Association said in a statement e-mailed today. That’s the first advance since May, when sales jumped 21 percent, and compares with 1.38 million tons in September 2012, data compiled by Bloomberg show. The median of estimates from four plantation executives and an industry official in a Bloomberg survey was for an increase to 1.6 million tons.
Rising palm demand may extend a rally in futures that slumped to an almost four-year low in July on prospects for record global supplies. U.S. reserves of soybeans, crushed to make soybean oil, were at their lowest in four years last month. While U.S. farmers will collect a record bean crop this year, the harvest progress trailed a five-year average as of Sept. 29, government data showed.
“Exports are rising strongly, so stockpiles will not build up as fast as earlier thought,” said Sandeep Bajoria, chief executive officer of Mumbai-based broker Sunvin Group, by phone.
Imports by India, the world’s biggest buyer, jumped 23 percent to 431,240 tons and purchases by China, the biggest cooking oil consumer, climbed 7.3 percent to 182,740 tons, according to Gapki.
Reserves were probably at 2.23 million tons from 2.2 million tons, the Bloomberg survey showed. Output gained 14 percent to 2.4 million tons, according to the median of estimates from four respondents. Gapki doesn’t publish inventories and production data. The forecasts for changes in reserves and output were derived by Bloomberg compared with earlier survey findings.
The contract for delivery in December traded at 2,370 ringgit ($746) a ton on the Bursa Malaysia Derivatives by 12:29 p.m. in Kuala Lumpur. Prices dropped to 2,137 ringgit in July, the lowest level since October 2009.
Soybeans traded at $12.74 a bushel on the Chicago Board of Trade today, 9.6 percent higher from a 19-month low in August. U.S. inventories of 141 million bushels on Sept. 1 were the smallest in four years, according to the U.S. Department of Agriculture. Eleven percent of crops in the main U.S. growing areas were harvested as of Sept. 29, less than the previous five-year average of 20 percent, USDA data show.
Farmers in South America delayed soybean planting because of dry weather, while rain curbed sunflower harvests in Ukraine and Russia, Hamburg-based Oil World said Oct. 1.
“Delays in the U.S. soybean harvest because of rain in the Midwest and sunflower harvest in Russia and Ukraine have drastically cut shipments of oilseeds,” and that has led to an increase in palm oil demand, said the planters and refiners association, called Gapki.
Exports from Malaysia rose 5.2 percent to 1.61 million tons in September, rising for a fourth month, the Malaysian Palm Oil Board said Oct. 10. Malaysia is the top producer after Indonesia.
The USDA estimates Indonesia’s production at a record 31 million tons in 2013-2014. World output will advance 5 percent to 58.1 million tons, boosting stockpiles by 17 percent to an all-time high of 9.2 million tons, according to the agency.