Indonesia Palm Exports Seen at 3-Month High on China Demandby and
Shipments seen 6.7% higher in July as China, India buy more
Inventories fall 4.4%, while output rises 0.5%, survey shows
Palm oil shipments from Indonesia, the world’s largest grower, probably rose to the highest level in three months in July after buyers from China to India boosted purchases.
Exports of palm and kernel oils climbed 6.7 percent to 1.9 million metric tons, according to the median of seven estimates from analysts and plantation executives compiled by Bloomberg. That would be the highest since April, data from the Indonesian Palm Oil Association showed.
Palm oil futures returned to a bull market on Wednesday as demand increased ahead of festivals in Asia and as a slow recovery in El Nino-hit yields constrains supplies. China’s appetite for palm oil is set to recover ahead of its major Mid-Autumn festival, potentially boosting demand for the edible oil used to make fried foods and seasonal treats like mooncakes.
“Demand from main importers such as China and India is rising,” said Derom Bangun, chairman of the Indonesian Palm Oil Board. Domestic demand is also increasing with biodiesel makers seeking more palm oil, eroding stockpiles, he said.
Demand from China began to recover in June. The country regained its position as the second-biggest buyer of Indonesian palm oil that month, surpassing the European Union for the first time since December and lagging only India. Purchases typically rise a couple of months before the Mid-Autumn festival that starts on Sept. 15 as refiners and food makers restock edible oils.
Palm oil for November delivery fell 0.6 percent to 2,627 ringgit ($658) a ton by the midday break Thursday on Bursa Malaysia Derivatives. Futures have climbed 5.7 percent this year.
Palm oil inventories in Indonesia probably fell 4.4 percent to 1.72 million tons in July from a month earlier, while output climbed 0.5 percent to 2.7 million tons, the survey showed. The palm association, or Gapki, will release July data later this month.
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Source: Gapki, Bloomberg Survey
*NOTE: Figures are in million tons