Palm oil dropped on concern that a rally in prices to a two-week high may weaken exports from Malaysia, the world’s second-biggest producer.
The contract for delivery in January, the most-active by open interest, retreated as much as 1.3 percent to 2,578 ringgit ($807) a metric ton on the Bursa Malaysia Derivatives, and was at 2,580 ringgit at 12:04 p.m. in Kuala Lumpur. Prices gained 4.2 percent last week to end at 2,613 ringgit, the highest price at close since Nov. 1.
Exports from Malaysia dropped 4.6 percent to 744,975 tons in the first 15 days of November from the same period a month earlier, surveyor Intertek said on Nov. 15. Palm oil, used in everything from candy to detergents, entered a bull market this month and is heading for its first annual gain in three years as production declines at plantations in Indonesia, the world’s biggest supplier.
“Exports should moderate due to high prices,” said Gnanasekar Thiagarajan, a director with Commtrendz Risk Management Services Pvt. “Prices are in a correction mode.”
Malaysia last week announced an increase in the tax on exports of crude palm oil for the first time since March. Cargoes will be taxed at 5 percent in December from 4.5 percent this month, according to the Customs Department.
Soybean oil for January delivery increased 0.2 percent to 40.82 cents a pound on the Chicago Board of Trade, rebounding from a 1.2 percent decline on Nov. 15. Soybeans for delivery in January were little changed at $12.8125 a bushel, after retreating 2.5 percent in the previous session.
Refined palm oil for May delivery dropped 0.6 percent to 6,244 yuan ($1,028) a ton on the Dalian Commodity Exchange and soybean oil slid 1 percent to 7,186 yuan.
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