Palm Oil Futures Drop as Prices at Two-Week High Deter BuyersRanjeetha Pakiam
Palm oil declined for the first time in five days as the highest prices in more than two weeks deterred buyers.
The contract for April delivery fell 0.5 percent to close at 2,574 ringgit ($773) a metric ton on the Bursa Malaysia Derivatives. Futures earlier reached 2,597 ringgit, the highest level for most-active futures since Jan. 6.
“High prices are curbing the already tepid demand,” said Paramalingam Supramaniam, director at brokerage Pelindung Bestari Sdn. in Selangor. “The rise in price is detrimental as the spread between soybean oil and palm is narrowing.”
Palm oil’s discount to soybean oil, a substitute in food and fuel uses, was at $62.65 a ton today compared with an average of $228.87 in the past year, data compiled by Bloomberg show. Exports from Malaysia, the second-biggest shipper, fell 15 percent to 748,303 tons in the first 20 days of January from the same period a month earlier, Intertek, a surveyor, said Jan. 20.
Soybean oil for March delivery declined 0.5 percent to 37.93 cents a pound on the Chicago Board of Trade. Soybeans gained 0.3 percent to $12.8425 a bushel.
Refined palm oil for May delivery lost 0.4 percent to close at 5,866 yuan ($969) a ton on the Dalian Commodity Exchange. Soybean oil ended little changed at 6,662 yuan.