Palm Oil Drops Most in Two Weeks on Weak Malaysia Export OutlookSwansy Afonso
Palm oil retreated the most in more than two weeks on concern that exports from Malaysia, the world’s second-largest producer, may decline as a rally in the ringgit and weakening crude oil prices curb demand.
The contract for delivery in February fell 1.4 percent to 2,555 ringgit ($804) a metric ton on the Bursa Malaysia Derivatives, the biggest drop at close for the most-active futures since Nov. 4.
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 1 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 $92.89 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 was little changed at 40.32 cents a pound on the Chicago Board of Trade. Soybeans dropped 0.2 percent to $12.8525 a bushel.
Refined palm oil for May delivery fell 0.4 percent to end at 6,216 yuan ($1,020) a ton on the Dalian Commodity Exchange and soybean oil slid 0.3 percent to close at 7,156 yuan.