Palm oil jumps to six-week high as exports seen cutting reserves

by **Cals** Mon 21 Oct 2013, 14:02

Business & Markets 2013

Written by Bloomberg

Monday, 21 October 2013 13:19

Oct. 21): Palm oil climbed to the highest level in six weeks on speculation that increasing exports from Malaysia, the world’s second-biggest producer, may trim inventories during the peak output period.

The contract for delivery in January jumped as much as 1.9 percent to 2,446 ringgit ($772) a metric ton on the Bursa Malaysia Derivatives, the highest price for most-active futures since Sept. 9, and ended the morning session at 2,419 ringgit. Palm for physical delivery in November was at 2,400 ringgit on Oct. 18, data compiled by Bloomberg show.

Shipments gained 3 percent to 1.03 million tons in the first 20 days of this month, surveyor Intertek said today. Reserves dropped 32 percent to 1.78 million tons last month from a record 2.63 million tons in December, data from the Malaysian Palm Oil Board shows.

“Expectations are that a mild increase in October production coupled with strong demand would keep stockpiles in check,” said Chee Tat Tan, an analyst at Phillip Futures Pte. in Singapore. Stronger economic data from China, the world’s largest palm user after India, last week also supported outlook for demand, he said.

In the three months ended Sept. 30, China’s gross domestic product expanded 7.8 percent from a year earlier, the nation’s statistics bureau said Oct. 18. Factory output advanced last month by 10.2 percent, in line with projections, a separate report showed.

Soybeans for delivery in November were little changed at $12.915 a bushel on the Chicago Board of Trade, while soybean oil for December gained 0.6 percent to 41.93 cents a pound.

Refined palm oil for May delivery gained 2.1 percent to 6,146 yuan ($1,008) a ton on the Dalian Commodity Exchange and soybean oil advanced 1.3 percent to 7,262 yuan.