Palm Oil Posts Fourth Weekly Decline on Biofuel Demand ConcernRanjeetha Pakiam
Palm dropped for a fourth week on concern losses in crude oil this week cut the lure of biofuels.
The contract for July delivery lost 0.6 percent to close at 2,294 ringgit ($756) a metric ton on the Bursa Malaysia Derivatives. Futures declined 2.2 percent this week for a fourth weekly decline, the longest losing streak since the four weeks ended Dec. 14.
Palm oil, used in everything from candy to biofuels, yesterday touched the lowest intraday price since December as West Texas Intermediate crude reached a four-month low. WTI futures gained today to trim a third weekly drop, the longest run of such declines since November.
“As crude oil prices declined sharply recently, biodiesel production may have dropped, reducing the demand for CPO,” said Sim Han Qiang, an investment analyst at Phillip Futures Pte, referring to crude palm oil by its initials. “If crude oil prices continue their downtrend,” palm oil will be pressured, he said in a report today.
Palm oil exports from Malaysia, the second-biggest producer, fell 4 percent to 648,275 tons in the first 15 days of April from the same period in March, Intertek said April 15.
Soybean oil for July delivery fell 0.5 percent to 49.42 cents a pound on the Chicago Board of Trade and soybeans dropped 0.2 percent to $13.87 a bushel.
Refined palm oil for September delivery rose 0.6 percent to close at 6,120 yuan ($991) a ton on the Dalian Commodity Exchange, while soybean oil gained 0.5 percent to end at 7,620 yuan a ton.