Palm oil dropped the most in a week on concern that exports from Malaysia, the biggest producer after Indonesia, may decline as buyers reduce purchases.
The contract for March delivery fell as much as 1.5 percent to 2,296 ringgit ($750) a metric ton on the Malaysia Derivatives Exchange, the most since Dec. 12, and ended the morning session at 2,318 ringgit in Kuala Lumpur. Futures are heading for a 27 percent drop this year, the worst annual loss since the 2008 financial crisis, as stockpiles in Malaysia climbed to a record.
Shipments fell 1.9 percent to 1 million tons in the first 20 days of December from a month earlier, surveyor Intertek said today. Stockpiles in Malaysia rose to 2.56 million tons last month, the nation’s palm oil board said Dec. 10. Inventories have swelled as output in Indonesia and Malaysia outpaced demand from China and India.
“India is not buying aggressively because of lower demand in the domestic market and higher stockpiles,” Ambika T.B., an analyst at Karvy Comtrade Ltd., said by phone from the Indian city of Hyderabad. “Cancellation of U.S. soybeans cargo by China has also led to weak sentiment in the oilseed complex.”
China canceled about 300,000 tons of soybeans for shipment before Sept. 1, the U.S. Department of Agriculture said on Dec. 18. Export sales of soybeans from the U.S., the largest grower and shipper last year, probably fell to 400,000 to 1 million tons in the week to Dec. 13, from 1.3 million tons a week earlier, according to a Bloomberg survey of five analysts.
Soybeans for March delivery declined 0.2 percent to $14.2775 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March climbed 0.5 percent to 48.98 cents a pound.
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