Indian demand spurs Malaysia's palm oil export

High demand from India and China has depleted the palm oil stock of Malaysia, triggering fears of a price rice in the global market.

According to data released in Malaysia, palm oil stockpile dropped 12 per cent in the last month to near a three-year low as exports gained for a second month.

Malaysian Palm Oil Board's data said stocks in the country fell to 1.18 million tonne in April from 1.34 million the month before.

Following increased demand from India and China, the exports went up 5.9 per cent to 1.12 million tonne in April, while production surged by 4.1 per cent to 1.13 million.

The price of the commodity, used in foods, as a cooking oil and as an alternative fuel, has gained 60%

over the past year. Malaysia and Indonesia account for about 85 per cent of global output.

Palm oil for July delivery, the most active contract rose 1.2 per cent, to $681 a tonne on the Malaysia Derivatives Exchange.

Exports to India are expanding as rising incomes, driven by economic growth, spur greater consumption. India, the world's second-biggest palm oil importer, may purchase 3.23 million metric tonne of palm oil in the year ending October, 36 per cent more than a year earlier. China imported 414,965 tonne of palm oil last month, 26 per cent more than a year earlier. Malaysia exported 8.1 per cent more palm oil in the first 10 days of May than a month earlier.