March 5 (Bloomberg) -- Palm oil fell for a second day, closing at the lowest level in two weeks, in Malaysia on speculation that demand from importers, including Pakistan, may continue to slow in the near term.
The May-delivery contract dropped 0.4 percent to close at 3,246 ringgit ($1,075) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur, the lowest closing level since Feb. 20.
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.
The price decline may not last as costlier crude and a shortage of soybean oil may boost palm oil’s appeal, Ng said.
Palm oil may gain to 3,500 ringgit by mid-April as cooking-oil demand tops supply, said Nagaraj Meda, chairman at forecaster TransGraph Consulting Pvt., who has forecast prices for 13 years. There was positive momentum after damage to soybean crops, Meda said.
Soybeans for May dropped 0.2 percent to $13.2975 a bushel on the Chicago Board of Trade, while soybean oil for the same month was little changed at 54.14 cents a pound. Soybeans rallied 10 percent last month as drought cut South American supplies.
Crude oil in New York traded at $105.82 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 yuan ($1,325) 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.
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