Palm oil declined by the most in a week after China canceled some soybean purchases, signaling weaker demand for vegetable oils in the world’s biggest buyer.
The contract for March delivery slid as much as 1.2 percent to 2,313 ringgit ($758) a metric ton on the Malaysia Derivatives Exchange, the biggest intraday fall since Dec. 12. The price was at 2,318 ringgit at 12:01 p.m. in Kuala Lumpur.
U.S. exporters said 420,000 tons of soybeans registered for delivery before Sept. 1 were canceled, including 300,000 tons bound for China, according to the U.S. Department of Agriculture. Palm oil, which competes with soy, is heading for a 27 percent drop this year, the worst annual loss since the financial crisis in 2008, as stockpiles in Malaysia have climbed to a record.
“Reports of the canceled cargo from China has brought down the prices,” Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt., said by phone from Mumbai. “Pressure from the higher stockpiles still remains, although technical indications are that prices are near the bottom.”
Stockpiles in Malaysia climbed to 2.56 million tons last month, the nation’s palm oil board said Dec. 10. Shipments fell 3.3 percent to 734,571 tons in the first 15 days of December from a month earlier, Societe General de Surveillance said.
Soybean oil for delivery in March was little changed at 49.58 cents a pound on the Chicago Board of Trade. Soybeans dropped 0.3 percent to $14.5575 bushel.
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