Palm Oil Declines for Second Day on Concern Demand Is Slowing

Palm oil fell for a second day in Malaysia on speculation that demand from importers, including Pakistan, may continue to slow in the near term.

The May-delivery contract dropped as much as 0.5 percent to 3,244 ringgit ($1,075) a metric ton on the Malaysia Derivatives Exchange, and traded at 3,247 at 4:03 p.m. in Kuala Lumpur.

The “negative news is on demand,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. Pakistan, the third-largest buyer, will cut purchases because of a transport issue, and a fall in Malaysian exports in February showed weak demand, she said.

Imports by Pakistan may drop 22 percent this quarter after a transporters’ strike closed factories, a refiners’ group said in remarks reported March 2. Shipments may fall to about 343,000 tons, the Pakistan Edible Oil Refiners Association said.

Malaysian exports fell 9.5 percent to 1.17 million tons in February from January, surveyor Societe Generale de Surveillance said on Feb. 29.

Price falls may not last as costlier crude oil increases palm oil’s appeal, while a shortage of soybean oil may also boost palm oil, Ng said.

Palm oil may gain to 3,500 ringgit by mid-April as cooking- oil demand tops supply, according to TransGraph Consulting Pvt. Chairman Nagaraj Meda, who’s forecast prices for 13 years. There was positive momentum after damage to soybean crops, Meda said.

Soybeans for May dropped 0.6 percent to $13.255 a bushel on the Chicago Board of Trade, while soybean oil for the same month was little changed at 54.02 cents a pound. Soybeans rallied 10 percent last month as drought cut South American supplies.

Crude oil in New York traded at $106.68 a barrel. The price reached $110.55 on March 1 amid concern that supplies from the Middle East may be disrupted.

Palm oil for delivery in September ended little changed at 8,358 ($1,326) yuan a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month climbed 0.2 percent to close at 9,402 yuan a ton.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at

To contact the editor responsible for this story: James Poole at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.