Palm Oil Declines as World Bank Lowers Global Growth Forecast
Palm oil fell the most in two weeks after the World Bank lowered its estimate for global growth this year, stoking concern demand for commodities may slow and as the currency weakened in India, the biggest importer.
The contract for August delivery lost 1.1 percent to 2,424 ringgit ($776) a metric ton on the Bursa Malaysia Derivatives, the steepest decline at close for most-active futures since May 30. Palm for local physical delivery in June was at 2,445 ringgit today, according to data compiled by Bloomberg.
The world economy will expand 2.2 percent in 2013, below January’s 2.4 percent projection, the lender said yesterday in a report. The forecast for developing nations was cut to 5.1 percent. Global stocks tumbled, while crude oil and copper fell.
“Lately the market has seen pretty slow with thin volumes and any kind of sensitive news triggering a sell-down,” said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. “The Indian rupee has been very weak, so that makes their imports more expensive.”
India’s rupee fell to a record against the U.S. dollar on June 11, and the currency’s 6.5 percent drop this quarter is the biggest in Asia. The country meets more than half of its cooking oil demand through imports. It buys palm oil from Indonesia and Malaysia and soybean oil from the U.S., Brazil and Argentina.
Soybean oil for December delivery was little changed at 47.44 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November dropped 0.3 percent to $13.10 a bushel.
Refined palm oil for September delivery retreated 1.3 percent to close at 6,276 yuan ($1,023) a ton on the Dalian Commodity Exchange, while soybean oil lost 1 percent to end at 7,422 yuan.
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