Palm oil exports from Malaysia, the second-largest producer, fell 7 percent in January from December, with the pace of decrease slowing as the month progressed amid a zero duty on shipments, according to data from Intertek today.
Shipments dropped to 1.46 million metric tons from 1.57 million tons in December, Intertek said. The 7 percent full- month drop compares with a 25 percent fall over 10 days, a 21 percent slide in 15 days, and a 14 percent fall in 25 days. A Societe Generale de Surveillance estimate is due later today.
Malaysia implemented a zero-tariff policy on crude palm exports from the start of the year to help clear record stockpiles, and said on Jan. 14 that it would be extended to February. Indonesia, the largest producer, will raise taxes on crude palm exports to 9 percent for next month from 7.5 percent in January, the Trade Ministry said on Jan. 28. Palm surged to the highest level in more three than months in Kuala Lumpur.
“The zero export duty for crude palm oil should help Malaysian shipments,” said Alvin Tai, an analyst at OSK Investment Bank Bhd. “On the China side, the past five days actually showed some improvement, so that’s a positive thing.”
China’s quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine, toughened inspections on imports from Jan. 1, prompting importers to push stockpiles at ports to a record before the change took effect.
Over the full month, shipments to China totaled 289,200 tons from December’s 355,037 tons, the Intertek data showed. Still, in the final six days of January, the volume of exports to China gained 14 percent compared with a 7.2 percent rise in the corresponding period in December, the data showed.
“We didn’t expect shipments from Malaysia to be an issue,” said Tai. “Malaysia’s shipments should be of a quality good enough to pass China’s standards.”
Palm oil for April delivery surged as much as 2.2 percent to 2,564 ringgit ($826) a ton on the Malaysia Derivatives Exchange, the highest level for the most-active contract since Oct. 25. Futures, which ended the morning session at 2,563 ringgit, are set for the biggest monthly gain since February.
Source From: Bloomberg