Palm Oil Declines as Malaysian Stocks, Ringgit Drop on Elections
Palm oil fell with stocks and ringgit in Malaysia after Prime Minister Najib Razak dissolved parliament to face a resurgent opposition in elections.
The contract for delivery in June fell as much as 1.3 percent to 2,350 ringgit ($761) a metric ton on the Malaysia Derivatives Exchange and ended the morning session at 2,378 ringgit in Kuala Lumpur. Prices have tumbled 33 percent in the past year as stockpiles expanded amid slowing demand.
Najib’s 13-party Barisan Nasional coalition, which won the 2008 vote by its slimmest margin, faces a resurgent opposition alliance led by former deputy prime minister Anwar Ibrahim. Under Malaysian law, elections must be held within 60 days of dissolution. Malaysian stocks fell the most in eight weeks and the ringgit slid for the first time in five days on speculation the ruling coalition will lose support, derailing reforms.
“With the elections approaching, investors may avoid holding ringgit-denominated assets on fear of political risks,” Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore. “Production is picking up in Malaysia but gaining exports may cushion prices.”
Futures will trade between 2,400 ringgit and 2,700 ringgit through May as ringgit weakens before elections, Dorab Mistry, director at Godrej International Ltd., said March 22.
Exports rose 2.8 percent to 1.36 million tons in March from a month ago, surveyor Intertek said on April 1. Shipments rose 5.5 percent to 1.37 million tons, Societe Generale de Surveillance said.
Soybean oil for May delivery slid 0.3 percent to 49.42 cents a pound on the Chicago Board of Trade, while soybeans for May fell 0.8 percent to $13.825 a bushel.
Refined palm oil for September delivery gained 0.5 percent to 6,256 yuan ($1,009) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month retreated 0.2 percent to 7,864 yuan a ton.
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