Palm oil fell for an eighth day, the worst run in almost seven years, on speculation that declining exports may keep inventories near a record high in Malaysia, the largest producer after Indonesia.
The contract for May delivery dropped 1.2 percent to 2,368 ringgit ($764) a metric ton on the Malaysia Derivatives Exchange, the lowest price at close for the most-active futures since Jan. 11. The losing streak is the longest since March 2006. Futures tumbled 6.3 percent last month.
Palm, used in foods, biofuels and cosmetics, has slumped 28 percent in the past year as supply and stockpiles surged to records and demand for the tropical oil fell due to a global economic slowdown. Inventories in January were at 2.58 million tons, holding near an all-time high of 2.63 million tons in December, according to the Malaysian Palm Oil Board. Exports declined 9.1 percent to 1.33 million tons in February from the previous month, surveyor Intertek said yesterday.
“We were hoping to see an increase in exports but it was a decline month-on-month, and that’s one of the factors that pressured prices,” said Benny Lee, chief market strategist at Jupiter Securities Sdn. in Kuala Lumpur. “Inventories will probably stay at these levels.”
An increase in Malaysia’s export taxes on crude palm oil this month will curb demand, Lee said. A 4.5 percent tax will be imposed on shipments in March after allowing duty-free exports in the first two months of this year.
Inventory at ports in China, the largest cooking oil importer, rose to a record 1.22 million tons, state-owned researcher Grain.gov.cn said today. Higher-than-expected shipments in the first two months worsened the glut, it said.
Refined palm oil for delivery in September dropped 0.2 percent to 6,608 yuan ($1,062) a ton on the Dalian Commodity Exchange, the lowest price at close since Nov. 12. Soybean oil for delivery in the same month declined 0.4 percent to 8,252 yuan a ton, the lowest price at close for the most-active futures since September 2010.
Soybean oil for May fell 0.2 percent to 49 cents a pound on the Chicago Board of Trade. Soybeans for May delivery declined 0.6 percent to $14.43 a bushel.