Malaysian palm oil futures fall on adequate stock

Malaysian palm oil futures fall on adequate stock

Bloomberg/Jakarta

Palm oil futures in Malaysia fell as factories that buy the edible oil have adequate stock to meet their needs for the next few weeks, said traders and producers.

"We have inventory surplus everywhere," said Ferdi Gunawan, a marketing officer at PT Salim Oil Grains, a Jakarta- based palm oil producer. "The market will be bearish for the next two to three weeks."

Indonesia, Malaysia, China and India have enough palm oil in stock to meet their requirements in the coming weeks, Gunawan said. Palm oil stockpiles in Malaysia rose to 1.41 million tons in November, the highest since February 2001, according to the Malaysian Palm Oil Board, a government agency. Indonesia doesn't provide stockpile data.

Palm oil futures on the Malaysian Derivatives Exchange for March delivery fell 13 ringgit, or 0.94 percent, to 1,374 ringgit a ton ($362) at 1:07 p.m. in Kuala Lumpur. The contract last week rose 0.1 percent to 1,387 ringgit amid concern supply from Indonesia could fall after the world's most powerful earthquake in 40 years hit the island of Sumatra.

Three out of four traders and producers polled by Bloomberg in Kuala Lumpur and Jakarta today said they plan to sell palm oil this week. The fourth said she planned to buy the commodity.

"We have increased rainfall in Sumatra, but that's seasonal and temporary. It shouldn't boost prices" of palm oil, said Salim Oil's Gunawan.

Last week's earthquake and tsunamis aren't expected to have any significant impact on Indonesia's palm oil output, said Gunawan.