Palm Oil Drops for Second Day on Weak Malaysian Export Outlook
The contract for delivery in February, the most-active by volume, fell as much as 0.9 percent to 2,569 ringgit ($806) a metric ton on the Bursa Malaysia Derivatives and ended the morning session at 2,573 ringgit in Kuala Lumpur.
Exports from Malaysia dropped 4.6 percent to 744,975 tons in the first 15 days of November from the same period a month earlier, surveyor Intertek said on Nov. 15. The ringgit has gained 0.7 percent against the dollar in the past week, lowering the appeal of commodities priced in the Malaysian currency.
“The recent strengthening of the ringgit against the greenback has discouraged some purchases by overseas buyers and refiners,” Tan Chee Tat, an analyst at Phillip Futures Pte., said by phone from Singapore. “Another reason is the weakness in crude oil prices as this causes palm oil to lose some demand in biodiesel usage.”
West Texas Intermediate oil for delivery in December traded near a five-month low at $92.93 a barrel in electronic trading on the New York Mercantile Exchange today. Palm oil, used in everything from candy to biofuels, entered a bull market this month and is heading for its first annual gain in three years as production declines in Indonesia, the biggest supplier.
“Prices have rallied quite a bit in a short span of time and this has enticed some investors to book profits,” Tan said.
Soybean oil for January delivery increased 0.3 percent to 40.47 cents a pound on the Chicago Board of Trade. Soybeans were little changed at $12.8925 a bushel.
To contact the reporter on this story: Swansy Afonso in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com