By Claire Leow
June 8 (Bloomberg) -- Palm oil futures in Malaysia, little changed today, may extend a recent decline on concern that orders from India, the second largest buyer, will slow after the country accumulated record stockpiles.
“With reserves in India at the current level, export numbers in the second half of 2009 may see significant weakening,” said an ECM Libra Investment Research report today.
August-delivery palm oil on the Malaysia Derivatives Exchange dropped as much as 0.8 percent to 2,500 ringgit ($712) a metric ton in Kuala Lumpur. The contract traded at 2,518 ringgit at 11:53 a.m. local time.
Export data from independent cargo surveyor Societe Generale de Surveillance on June 1 showed exports of palm oil to India from Malaysia, the second-largest producer, dropped 26 percent in May from a month earlier, after a 94 percent surge in April, signaling stockpiling has peaked, analysts said.
The next set of export data is out on Wednesday.
The price has surged 49 percent this year as soybean crops declined in Brazil and Argentina and soybean stockpiles in the U.S. are forecast to reach a five-year low. Palm oil competes with soybean oil for applications in food and biofuels.
India may slow the pace of imports after domestic stockpiles surged, Govindlal G. Patel, director of Dipak Enterprise, said on June 2. The country’s cooking oil reserves probably climbed 55 percent to 1.7 million tons in the seven months ended May, exceeding normal levels of 1.1 million tons, he said.
To contact the reporter for this story: Claire Leow in Singapore at cleow@bloomberg.net
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