Palm Declines as Malaysian Exports Seen Dropping for Third MonthRanjeetha Pakiam
Palm oil retreated from the highest level in more than two weeks on speculation that exports from Malaysia, the world’s second-biggest producer, may drop for a third month.
The contract for April delivery declined 0.5 percent to close at 2,590 ringgit ($773) a metric ton on the Bursa Malaysia Derivatives. Futures closed at 2,602 ringgit yesterday, the highest price since Jan. 6. The loss today pared the weekly gain to 2 percent.
Exports from Malaysia dropped for a second month in December, according to the nation’s palm oil board. Shipments 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. A rebound in the ringgit can further reduce exports, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental Singapore Pte.
“Palm is struggling because of the poor export off-take,” said Thiagarajan. “The ringgit’s weakness is the reason why we saw prices firm throughout the week. The currency could get a bit firmer because the U.S. dollar has fallen” and that may impact currencies in the emerging markets, he said.
The ringgit declined 1.1 percent this week, the biggest loss in a month, according to data compiled by Bloomberg. It touched 3.3363 yesterday, the weakest level since Aug. 28, and retreated 0.1 percent today.
Soybean oil for March delivery declined 0.3 percent to 37.75 cents a pound on the Chicago Board of Trade. Soybeans were little changed at $12.765 a bushel.
Refined palm oil for May delivery closed little changed at 5,842 yuan ($966) a ton on the Dalian Commodity Exchange. Soybean oil declined 0.8 percent to end at 6,606 yuan.