JAKARTA, Sept 22 — Palm oil exports from Indonesia, the world’s largest producer, probably jumped the most in almost two years in August after China stepped up imports to meet rising demand during festivals.
Shipments climbed 20 per cent to 1.92 million metric tonnes last month from 1.596 million tonnes in July, according to the median of six estimates from analysts, refiners and plantation executives compiled by Bloomberg. That would be the steepest increase since October 2014, data from the Indonesian Palm Oil Association showed.
Futures in Kuala Lumpur are trading near a five-month high on speculation that rising demand ahead of the mid-Autumn festival in China and Deepavali celebrations in India will draw down inventories in Indonesia and Malaysia, which together account for 86 per cent of the global supplies. Malaysian inventories slumped to the lowest in more than five years in August and output may drop 10 per cent this year after El Nino cut yields in the first half.
“We’ve seen plenty of demand,” said Derom Bangun, chairman of the Indonesian Palm Oil Board. “China is buying a lot ahead of moon cake festival,” he said estimating August shipments at about 2 million tonnes.
Palm oil rose 0.2 per cent to RM2,683 (US$652) a ton on Bursa Malaysia Derivatives at the midday break today. Futures reached as high as 2,728 ringgit in intraday trading yesterday, the highest level since April 21. Prices are up 6.2 per cent this month after surging 9.1 per cent in August.
Palm oil production probably rose 1.4 per cent to 2.82 million tonnes in August from a month earlier, while inventories increased 1.1 per cent to 1.9 million tonnes, the survey showed. The palm oil association, known as Gapki, may release August data later this month.
Return of rains over the northern region of the country helped increase production, while the southern areas remain dry, said Sahat Sinaga, executive director at the Indonesian Vegetable Oil Industry Association. — Bloomberg