Palm oil fell the most since November as forecast for a record U.S. soybean crop next year deepened concern that global cooking oil supplies may increase and a tax on exports will curb demand for Malaysian supplies.
The contract for delivery in May dropped 2.5 percent to 2,471 ringgit ($798) a metric ton on the Malaysia Derivatives Exchange, the biggest drop at close since Nov. 8, in Kuala Lumpur. Futures gained 2.1 percent last week.
Farmers in the U.S. will expand soybeans sowing, taking the next harvest to an all-time high of 3.4 billion bushels, and doubling inventories by Aug. 31, 2014 to 250 million bushels, the U.S. Department of Agriculture said Feb. 22. Soybean oil futures fell for a third day to the lowest level since Jan. 14 in Chicago today.
“Palm oil prices fell in line with soybean oil, not just due to fundamental factors but also because of a stronger dollar and fund selling across the grains markets,” said Chandran Sinnasamy, head of trading at LT International Futures Sdn. in Kuala Lumpur. “Palm oil exports may be lower until the first half of March at least because of the increase in tax.”
Shipments from Malaysia, the second-largest producer, climbed 4.6 percent to 1.15 million tons in the first 25 days of February from a month earlier, surveyor Intertek said today. The gain was smaller than the 18 percent increase in the first 15 days of the month, data showed. Exports rose 2.7 percent to 1.13 million tons, Societe Generale de Surveillance said.
Crude palm exports from Malaysia will be taxed at 4.5 percent in March after shipments were allowed at zero duty in the previous two months. Indonesia, biggest producer, also raised the export tax for March to 10.5 percent from 9 percent this month, the nation’s trade ministry said on Feb. 22.
Soybean oil for May delivery fell as much as 1.1 percent to 50.16 cents a pound on the Chicago Board of Trade. The cooking oil’s premium to palm oil was at $313.1338 a ton today. The two are the most consumed edible oils in the world. Soybeans for May delivery gained 0.4 percent to $14.4925 a bushel.
Refined palm oil for delivery in September slumped 4.1 percent to close at 6,780 yuan ($1,088) a ton on the Dalian Commodity Exchange, the biggest fall since Oct. 8. Soybean oil for delivery in the same month fell 3.2 percent to end at 8,422 yuan a ton, the most since September 2011.