Palm oil advanced to the highest level in more than a week on speculation that inventories in Malaysia probably fell last month as exports from the world’s second-largest producer increased.

The contract for delivery in June climbed as much as 0.8 percent to 2,419 ringgit ($792) a metric ton on Bursa Malaysia Derivatives, the highest price for the most-active futures since March 28, before trading at 2,414 ringgit at 11:28 a.m. in Kuala Lumpur. Futures lost 33 percent in the past year.

Inventories shrank 7 percent to 2.27 million tons in March from a month earlier, the steepest drop since January 2011, according to the median of estimates from two plantation companies and four analysts in a Bloomberg survey published yesterday. Output gained 2.3 percent to 1.33 million tons, while exports rose 2.1 percent to 1.43 million, according to the survey. The Malaysian Palm Oil Board is scheduled to release the official data tomorrow.

“We’re looking at the stockpiles to trim lower and if this turns out to be true it will boost the palm oil market,” Ker Chung Yang, an analyst at Phillip Futures Pte., said by phone from Singapore. Inventories may remain between 2.1 million tons and 2.3 million tons in the next few months, he said.

Reserves have fallen 7.2 percent to 2.44 million tons in February from a record 2.63 million tons reached in December, according to the board. Shipments from Malaysia rose 5.5 percent to 1.37 million tons in March, according to Societe Generale de Surveillance.

Soybean oil for May delivery was little changed at 49.49 cents a pound on the Chicago Board of Trade. Soybeans for delivery in May climbed 0.4 percent to $13.835 a bushel.

Refined palm oil for September delivery rose 0.7 percent to 6,326 yuan ($1,020) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month gained 0.5 percent to 7,956 yuan a ton.

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Source : Bloomberg