Palm oil declined for the first time in four days on concern that exports from Malaysia, the second- largest producer, may decrease this month as China buys less after tightening quality regulations on imports.
The contract for delivery in April fell as much as 0.6 percent to 2,450 ringgit ($806) a metric ton on the Malaysia Derivatives Exchange and ended the morning session at 2,457 ringgit in Kuala Lumpur. Futures closed 1.9 percent higher yesterday, the biggest gain in almost three weeks.
China’s quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine, toughened inspections on imports from Jan. 1. Exports from Malaysia to the biggest cooking oil consumer declined 28 percent in the first 20 days of January from the same period a month earlier, data from Societe Generale de Surveillance showed Jan. 21. Total shipments from Malaysia in that period fell 20 percent, according to SGS.
The full-month “export figures may be worse than the first 20 days,” Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., said by phone in Kuala Lumpur. “China inventories are also at a record high.”
Stockpiles at China’s major ports rose to a record 1.18 million tons, state-owned researcher Grain.gov.cn said Jan. 16. Malaysian inventories reached an all-time high of 2.63 million tons in December, prompting the government to cut export taxes. The tariffs were reduced to zero for this month and will be maintained at that level in February.
Refined palm oil for delivery in September dropped 0.3 percent to 7,120 yuan ($1,145) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month fell 0.2 percent to 8,834 yuan a ton.
Soybeans for March delivery lost 0.2 percent to $14.485 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March was little changed at 52.38 cents a pound.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com