Palm oil climbed to the highest level in almost two weeks after data that showed shipments climbed this month from Malaysia, the world’s second-largest supplier, and production plunged to a two-year low in February.

Palm oil for May delivery gained as much as 0.8 per cent to RM2,467 a metric tonne on the Malaysia Derivatives Exchange, the highest price for the most-active contract since February 26. Futures were RM2,461 by 5:17pm in Kuala Lumpur.

Exports gained 2.2 per cent to 438,549 tonnes in the first 10 days of March from 429,070 tonnes in the same period last month, according to Societe Generale de Surveillance. The country shipped 441,025 tonnes in the 10 days, compared with 440,830 tonnes, surveyor Intertek said. Production dropped 19 per cent in February, draining stockpiles from a month earlier, the Malaysian Palm Oil Board said today.

“It’s more or less an expected figure,” Donny Khor, associate director for futures and options at OSK Investment Bank Bhd, said referring to reserves. The export data for the first 10 days of March “at least give a little bit of a boost and provide some underlying support.”

Output slumped to 1.3 million tonnes last month, the lowest level since February 2011 and more than the 13 per cent drop estimated in a Bloomberg survey published March 5. Inventories shrank to 2.44 million tonnes and exports retreated 14 per cent to 1.4 million tonnes, according to data from the board. 

Malaysian reserves reached a record 2.63 million tonnes in December.

Soybean oil for May delivery was little changed at 50.28 cents a pound on the Chicago Board of Trade. 

Soybeans for May delivery gained 0.3 per cent to US$14.75 a bushel.

Refined palm oil for delivery in September dropped 0.7 per cent to close at 6,578 yuan (US$1,058) a tonne on the Dalian Commodity Exchange. Soybean oil for delivery in the same month declined 1.5 per cent to end at 8,200 yuan a ton, the lowest level for the most-active contract at close since September 2010.– Bloomberg

Source: Business Times