Palm Oil Declines for Third Time in Four Days on Demand Concerns
Palm oil fell for the third time in four sessions on concern that a decrease in shipments from Malaysia, the world’s largest producer after Indonesia, will boost stockpiles as production recovers from a low-output season.
The contract for July delivery lost as much as 0.6 percent to 2,260 ringgit ($740) a metric ton on the Bursa Malaysia Derivatives, before trading at 2,270 ringgit at 11:47 a.m. in Kuala Lumpur.
Exports declined 6.4 percent to 864,206 tons in the first 20 days of April, surveyor Societe Generale de Surveillance said April 22. Production, which is typically low in January and February each year, may increase and boost reserves that dropped to a seven-month low of 2.17 million tons in March as shipments gained for the first time in five months, Malaysian Palm Oil Board data show. Futures lost 23 percent in 2012 when stockpiles rose to a record 2.6 million tons.
“If inventories can’t go to 2 million tons within the first quarter of this year then prices will continue to be pressured,” said Benny Lee, chief market strategist at Jupiter Securities Sdn. in Kuala Lumpur. “Production is going to be up as well in April.”
Soybean oil for July delivery lost 0.3 percent to 48.28 cents a pound on the Chicago Board of Trade and soybeans declined 0.2 percent to $13.5575 a bushel.
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