Palm oil shipments from Malaysia, the world’s biggest producer after Indonesia, tumbled in February from a month earlier to the lowest level since June 2007 as exports to China dropped during the Lunar New Year festival.
Sales decreased 18 per cent to 971,640 metric tons after a 22 per cent drop in January, according to Malaysian Palm Oil Board data. The median estimate in a Bloomberg survey published 6 March was for a decline to 1.08 million tons. Exports to China retreated 70 per cent to 64,765 tons, the data show.
Palm oil, used in food and fuel, lost 22 per cent in the past year as a collapse in crude oil costs cut the appeal of cooking oils as biofuel. Global supplies of soybeans, used to make an alternative oil, expanded to a record. China, the largest palm oil importer after India, was on a week-long break for the New Year in February.
“The big drop was in shipments to China because of the Chinese New Year period -- it’s unusually low,” Alvin Tai, an analyst at RHB Investment Bank, said by phone in Kuala Lumpur. “Inventory is actually on the low side,” in China, so there should be some recovery in exports, he said.
Futures fell 0.7 per cent to 2,256 ringgit ($610) a ton on Bursa Malaysia Derivatives in Kuala Lumpur at the midday break before the release of the data.
Stockpiles dropped 1.5 per cent to 1.74 million tons and production declined 3.4 per cent to 1.12 million tons, the palm oil board said in a statement e-mailed on Tuesday.
In the first 10 days of March, shipments decreased 12 per cent from a month earlier to 262,168 tons, according to Intertek, a surveyor.
Bloomberg News, edited by ESM
