Aug. 14 (Bloomberg) -- Palm dropped after data showed that production in Malaysia, the world’s second-largest supplier, gained the most in 10 months in July, as the growing cycle entered the high-output season.
The contract for October delivery fell 0.3 percent to close at 2,290 ringgit ($698) a metric ton on the Bursa Malaysia Derivatives. Futures closed 2.5 percent higher yesterday, the biggest gain since Jan. 2, on expectation that shipments will increase this month. Palm oil for local physical delivery in August was at 2,340 ringgit, data compiled by Bloomberg show.
Output gained 18 percent to 1.67 million tons, the biggest jump since September, according to data from the Malaysian Palm Oil Board. That’s more than the median estimate in a Bloomberg survey for 1.56 million tons. Inventories were 1.66 million tons, 1 percent higher than in June, which was the lowest level since March 2011, and in line with the survey median of 1.65 million tons. Exports gained 0.5 percent to 1.42 million tons, while imports rose 57 percent to 50,173 tons.
“The rise in production is very significant,” said Vijay Mehta, a director of Commodity Links Pte. in Singapore. “We were expecting an increase of about 8 to 10 percent. Generally, output slows during Ramadan” as plantation laborers work shorter hours during the Muslim fasting month, he said.
Ramadan started in July this year. While palm is produced year-round, output typically accelerates in the second half because of growing cycles.
Soybean oil for delivery in December declined 0.6 percent to 42.70 cents a pound on the Chicago Board of Trade. Soybeans for November lost 1.2 percent to $12.135 a bushel.
Refined palm oil for January delivery retreated 1.1 percent to close at 5,510 yuan ($900) a ton on the Dalian Commodity Exchange. Soybean oil fell 1 percent to end at 7,076 yuan a ton.
--Editor: Thomas Kutty Abraham