Palm oil imports by India, the world’s biggest buyer, probably climbed for the first time since June as traders rebuilt reserves from the lowest level in 21 months amid a delay in the domestic oilseed harvest.
Palm oil stockpiles in Malaysia probably jumped to the highest level in eight months as exports from the world’s second-biggest producer declined for the first time since May, a Bloomberg survey showed. Futures fell.
Palm advanced the most in almost two weeks on speculation that an increase in crude oil prices to the highest level in more than a month will boost demand for the tropical oil in biodiesel as production declines in Indonesia.
Palm, the world’s most used cooking oil, is set to extend a bull market rally as output drops in Indonesia and biofuel mandates expand globally, said Dorab Mistry, director at Godrej International Ltd.
Palm-oil production in Indonesia, the world’s biggest supplier, is dropping for the first time in 15 years after heavy rains and drought. The decline is spurring a rebound in prices from the lowest level in 45 months.
Palm oil will probably trade from 2,400 ringgit ($748) to 2,600 ringgit in coming months after output was less than expected and as producers expand biofuel use, said Dorab Mistry, director at Godrej International Ltd.
Palm oil may extend a decline as supply of the most used cooking oil from Indonesia and Malaysia climbs and biodiesel demand peaks, said Dorab Mistry, director at Godrej International Ltd., signaling a third year of losses.