Palm Oil Gains for Third Day on Exports, Production Outlook

Oct. 13 (Bloomberg) -- Palm oil gained for a third day after exports from Malaysia, the second-largest producer, increased in the first ten days of the month and on forecasts for a decline in output from a seasonal high.

Shipments, rose 3.9 percent to 345,393 metric tons in the first 10 days of October compared with the previous month, ociete Generale de Surveillance, an independent cargo surveyor estimated yesterday. The gain was 8.3 percent to 339,195 tons, rival surveyor Intertek said. September production rose 4.1 percent from August to the second-highest level on record, according to Malaysian Palm Oil Board data.

“Industry players have indicated that they expect crude palm oil production to peak in September or October,” an AMResearch Sdn. report said today. Production should start to “soften” toward the end of the year, the report said.

December-delivery palm oil on the Malaysia Derivatives Exchange, which had the biggest gain in two weeks yesterday, rose 0.5 percent to 2,157 ringgit ($636) a ton.

Typically Malaysian palm oil production peaks in the third quarter, with 55 percent of annual output in the second half. This year’s peak was delayed by rains that affected fruiting.

“For the full year, the Malaysian Palm Oil Board is forecasting palm oil production at 17.6 million tons, 4 percent lower than their previous estimate of 18.4 million ton and flat compared to last year,” AMResearch said. Output in September was 1.56 million tons, according to palm oil board data yesterday.

The tropical oil also rose after rival soybean oil surged 3.8 percent in Chicago trading yesterday, the biggest gain in two months. Soybean oil traded at 36.96 cents a pound at 2:29 p.m. Singapore time.

The premium of soybean oil to palm oil was 24 percent today, compared with 28 percent yesterday, according to Bloomberg data.