By Pratik Parija Feb. 2 (Bloomberg) -- Palm oil fell for second day as an anticipated increase in soybean output pared the appeal of the commodity amid an expected drop in demand for vegetable oils in India, the second-biggest buyer of the cooking fat. The April-delivery contract dropped as much as 0.7 percent to 2,427 ringgit ($710) on the Malaysia Derivatives Exchange and was at 2,434 ringgit at 4:33 p.m. local time. Soybeans for March delivery in Chicago lost 0.5 percent to $9.0525 a bushel, the lowest level since Oct. 7, and traded at $9.0725. Palm oil often tracks soybean oil as they compete in food and fuel applications. Global soybean output in the year that began Oct. 1 will be a record 253.4 million tons, higher than the 250.3 million tons forecast a month ago, the U.S. Department of Agriculture said last month. The country produced 210.9 million tons last year. Palm oil is “under pressure because of soybeans,” said Alvin Tai, an analyst at OSK Research Sdn. “Soybeans are under pressure from the South American crop, which is expected to be bumper.” Vegetable oil imports by India, the biggest consumer after China, will drop this month and next as stockpiles at ports have risen to about 800,000 metric tons, compared with 600,000 tons, a level deemed normal, Govindlal G. Patel, director of Dipak Enterprise, said in a phone interview today. Purchases in January likely dropped to 750,000-800,000 tons compared with 856,690 bought in the year-ago month, he said. Malaysia’s palm oil exports grew 27.5 percent in January, compared with a month earlier, Interek, an independent market surveyor, said yesterday. A total of 1.5 million metric tons were tracked in January, it said. Demand for vegetable oil in China, the biggest buyer, may wane after peaking in the Spring Festival in the second-half of February, Guoxin Futures Co. said in a report yesterday. To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net.

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