Palm oil slumped to a three-year low on speculation that shipments from Malaysia, the world’s second-largest producer, may decline for a second month.
The contract for February delivery fell 0.5 percent to 2,230 ringgit ($730) a metric ton on the Malaysia Derivatives Exchange, the lowest price at close for the most-active contract since November 2009. Futures are set for a 30 percent drop this year, the worst annual loss since the financial crisis in 2008.
Tariff on crude palm oil exports from Malaysia may be zero next month under a new tax structure, Maybank Investment Bank Bhd. said Dec. 11. The average free-on-board price between Nov. 10 and Dec. 9 that will be taken to set the January levy is estimated to be below the minimum threshold of 2,250 ringgit for the tax to apply, analysts Ong Chee Ting and Chai Li Shin said.
“If the tax next month is going to be zero, some people may take the opportunity to export next month,” said Ivy Ng, an analyst at CIMB Group Holdings Bhd. “Most people will just buy hand-to-mouth. I would expect exports to be better in January.”
Exports from Malaysia fell 2.8 percent to 504,032 tons in the first 10 days of December from 518,688 tons in the same period a month earlier, surveyor Intertek said Dec. 10. Stockpiles climbed 2.3 percent to an all-time high of 2.56 million tons in November from a month earlier, the Malaysian Palm Oil Board said Dec. 10.
“The stocks are still high and they have to keep prices low to get rid of the stocks,” said Ng.
Soybean oil for delivery in January was little changed at 49.51 cents a pound on the Chicago Board of Trade. Soybeans for March lost 0.2 percent to $14.6825 a bushel.
Palm oil for May delivery gained 0.3 percent to close at 6,698 yuan ($1,070) a ton on the Dalian Commodity Exchange. Soybean oil for May was little changed at 8,610 yuan a ton.