Palm oil from Indonesia climb to highest in five years

Selasa, 13 November 2012 | 07:36

JAKARTA - Palm oil exports from Indonesia, the worlds largest producer, jumped to the highest level in at least five years in February after China and Pakistan boosted purchases to benefit from a slump in prices.

Shipments, including palm and kernel oils, gained 9.1 percent to 2.04 million metric tons from 1.87 million tons in January, according to data from the Indonesian Palm Oil Association emailed Thursday.

Thats the most in a month at least since 2008, according to the earliest available data from the association compiled by Bloomberg, and it beat the median estimate in a Bloomberg survey of 1.51 million tons.

Rising exports may help trim Indonesian stockpiles and halt a 34 percent decline in prices in Kuala Lumpur in the past year. Indonesias inventories of the tropical oil used in everything from noodles to biofuels dropped 14 percent to 3 million tons in February from a month earlier, according to a Bloomberg survey published Feb. 14.

It seems that exporters were able to adapt to the new imports rule in China that had caused some concern in January, said Fadhil Hasan, executive director at the growers group, known as Gapki. Demand for Lunar new year festival in February also boosted shipments, he said.

China imposed more stringent rules on edible oil imports to improve food-safety standards with effect from Jan. 1 and Indonesias exports to the Asian country fell 15 percent in January. Shipments jumped 108 percent to 370,110 tons in February and sales to Pakistan surged 80 percent to 149,850 tons, Gapki data showed. Exports to India, the worlds largest buyer, fell 13 percent to 699,770 tons and sales to European Union dropped 22 percent to 305,120 tons, the data showed.

Palm oil and its by-products accounted for 93 percent of Indonesias total February shipments, or 1.9 million tons, and the remainder was palm kernel oils, the data showed. Exports in the first two months of the year rose 29 percent to 3.9 million tons from a year earlier, Gapki data showed.

Meanwhile, Palm oil fell as crude oil traded near the lowest price in more than a week on rising stockpiles in the U.S., reducing the appeal of biofuels.

The contract for delivery in June dropped 0.2 percent to close at 2,392 ringgit ($777) a metric ton on the Malaysia Derivatives Exchange. Prices have tumbled 33 percent in the past year as stockpiles expanded amid slowing demand.

Palm oil imports by India, the biggest consumer, may slow as the local mustard crop comes into the market, said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai. Malaysias palm oil shipments to India dropped 49 percent to 81,142 tons last month from 158,250 tons in February, according to estimates by surveyor Societe Generale de Surveillance.

Soybean oil for May delivery gained 0.2 percent to 49.23 cents a pound on the Chicago Board of Trade, while soybeans for May was little changed at $13.7925 a bushel.