Palm Oil Ends Near One-Week High as Inventories Seen Declining

Palm oil ended near the highest level in a week as optimism that stockpiles in Malaysia were set to decline was countered by speculation that India may reduce imports because of near record domestic cooking oil reserves.

The contract for July delivery closed little changed at 2,287 ringgit ($769) a metric ton on the Bursa Malaysia Derivatives. Futures ended at 2,289 ringgit yesterday, the highest price at close since April 26.

Reserves in Malaysia, the world’s second-largest producer, probably fell 5.1 percent to 2.06 million tons in April, the least since July, a Bloomberg survey published this week showed. Shipments fell 6.5 percent to 1.44 million tons, according to the survey. Official data are due for release tomorrow.

“Market generally expects Malaysian inventories to decline, but there’s a possibility that it could just be flattish month-on-month because of weaker exports.” said Arhnue Tan, an analyst at Alliance Investment Bank Bhd. “There could be some slowdown from Indian imports of palm oil in the coming one to two months if they are well stocked.”

India’s imports of vegetable oils, including those for industrial use, probably fell for the first time in five months in April as reserves stayed near a record and summer heat curbed consumption of fried foods, according to the median of estimates from five processors and brokers compiled by Bloomberg. Palm oil purchases may have gained 9 percent to 560,000 tons last month, the survey showed. The Solvent Extractors’ Association of India will release the data next week.

Soybeans for July delivery gained 0.3 percent to $13.945 a bushel on the Chicago Board of Trade. Soybean oil climbed 0.3 percent to 48.94 cents a pound.

Refined palm oil for September delivery dropped 0.3 percent to close at 5,966 yuan ($973) a ton on the Dalian Commodity Exchange. Soybean oil slid 0.6 percent to end at 7,366 yuan a ton.

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