KUALA LUMPUR: Palm oil advanced for the first time in three days on speculation that a report today from Malaysia, the second-largest producer, may show exports increased in April, paring inventories to the lowest level in eight months.
The July-delivery contract gained as much as 0.9% to 3,364 ringgit or US$1,097 a metric ton on the Malaysia Derivatives Exchange, before trading at 3,360 ringgit at 12:22 p.m. in Kuala Lumpur.
The Malaysian Palm Oil Board is scheduled to release data on production, exports and stockpiles at 12:30 p.m.
Stockpiles fell 2% to 1.92 million tons in April, the lowest level since August, from 1.96 million tons a month earlier, according to the median estimate in a Bloomberg survey last week of three plantation companies and two analysts.
Exports gained 3% to 1.38 million tons, the survey showed.
“Exports will be quite strong, so that should be positive for prices,” said James Ratnam, an analyst at TA Securities Holdings Bhd.
“The macro side does not look too good, so that will be weighing down on the market, but overall the data is expected to be quite bullish.”
Palm oil has dropped 7.5% from 3,628 ringgit reached on April 10, the highest price since March 2011, on speculation output may increase in Malaysia, while a worsening debt crisis in Europe will hurt demand.
Production advanced 6.6% to 1.29 million tons in April from a month earlier, the biggest gain since September, according to the survey. Shipments dropped 6% to 450,269 tons in the first 10 days of May from the same period a month earlier, Intertek said.
Imports of crude and refined palm oil advanced to 515,000 tons from 350,469 tons, the survey showed..
Palm oil for September delivery climbed 0.2% to 8,578 yuan or US$1,359 a ton on the Dalian Commodity Exchange. (Bloomberg/T03)
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