KUALA LUMPUR (Commodity Online): Palm oil prices which rose 20% this year has now fallen as prospects of record harvest of soybean crop in USA and Argentina have capped gains in prices.

At Malaysian Derivatives Exchange, December delivery palm oil has fallen to US $586 on Tuesday. Supplies of palm oil had fallen in September due to Ramadan and subsequent holidays which is likely to pick up this month, Bloomberg reported.
Production of palm oil in Malaysia has risen to 1.49 million tonnes the highest since November 2008, the Bloomberg report added. Stock of palm oil has now risen to a six month high at 1.42 million tonnes.

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Argentina may grow 63 per cent more soybeans next year than the drought-reduced harvest this year, as farmers plant less of other crops, the U.S. Department of Agriculture’s Foreign Agricultural Service said.

The Solvent Extractors Association of India had recently said that import of vegetable oils by India during August 2009 was marginally up by 4% and reported at 650,603 tons compared to 622,813 tons for August’08. Overall import of vegetable oil during November 08 to August’09 jumped by 49% to 7,070,491 tons from 4,761,331 tons for the same period of last year.

Import of Refined Oil (mainly RBD Palmolein) during November 2008 to August 2009 is reported at 1,005,595 tons (15%) compared to 398,342 (9%) and Crude Oil is reported at 5,697,803 tons (85%) compared to 3,800,208 tons (91%) for the same period of last year.

Analysts said that with higher imports likely due to government policy of containing edible oil prices may support palm oil prices in the near to medium term.