Palm Oil Drops to One-Month Low as Production Boosts StockpilesSwansy Afonso
Palm oil fell for a second day to the lowest level in more than a month on concern that increased output and slower shipments in Malaysia, the second-largest producer, are boosting inventories.
The contract for December delivery slid 0.3 percent to 2,294 ringgit ($713) a metric ton on the Bursa Malaysia Derivatives, the lowest futures close since Aug. 14. Futures lost 4.5 percent this month after advancing the most in almost three years in August. Palm for physical delivery in October was at 2,335 ringgit, data compiled by Bloomberg show.
Stockpiles in Malaysia and Indonesia, the top producers, will begin to increase from September and should keep expanding at least until January, said Dorab Mistry, director at Godrej International Ltd., at a conference in Mumbai on Sept. 22.
“Expectations that higher output would add to the stockpiles is keeping the market under pressure,” Nalini Rao, an analyst at brokers India Infoline Ltd., said by phone from Mumbai. “Exports have also slowed a bit.”
Shipments from Malaysia rose 6.5 percent to 1.24 million tons in the first 25 days of September from the same period a month earlier, surveyor Intertek said today. The increase is lower than the 13 percent growth Sept. 1-20. Shipments climbed 6.4 percent to 1.21 million tons, SGS (Malaysia) Sdn. said.
Soybeans for delivery in November added 0.4 percent to $13.1825 a bushel on the Chicago Board of Trade. Soybean oil for December delivery gained 0.2 percent to 42.16 cents a pound.
Refined palm oil for January delivery fell 0.2 percent to end at 5,400 yuan ($882) a ton on the Dalian Commodity Exchange. Soybean oil fell 0.3 percent to close at 7,060 yuan.