SINGAPORE, May 10 (Reuters) -
Malaysia's end-April stocks of palm oil fell to their lowest in nine months,
breaking below a key psychological threshold in a move that could spur
additional buying and support prices.
Inventories in the world's
second-largest producer of the edible oil dropped 11.3 percent in April to 1.93
million tonnes in the steepest fall since Jan 2011. The decline outpaced a fall
of 10.9 percent in March.
The April stocks figures far
exceeded expectations of a drop of 6.1 percent to 2.04 million tonnes, and the
fall below 2 million could draw buyers when the market re-opens later.
"The market expects stocks to
fall, but not below the two-million-tonne mark. This is a positive surprise and
we can expect prices to gain further later," said a trader with a
Malaysian commodities brokerage.
By the midday break, the benchmark
futures were up 1 percent at 2,310 ringgit per
tonne. Leading analyst Dorab Mistry had forecast prices could rise to 2,400 to
2,700 ringgit by the end of May as weaker output sped a fall in stockpiles.
Production edged up 3.1 percent to
1.37 million tonnes in April, but the yield recovery missed expectations of
1.39 million. Exports fell just 5.6 percent to 1.45 million tonnes from a month
ago, less than a forecast of 9 percent.
