Palm Oil Drops As Malaysian Exports Fall

Palm oil fell for a third day after a drop in exports from Malaysia, the

world’s second-largest producer, and as some investors sold the

commodity to lock in gains ahead of the Christmas and New Year break.

The

February-delivery contract dropped as much as 1.1 per cent to RM3,627

(US$1,155) a metric ton and traded at 3,630 ringgit at 11:23 a.m. in

Kuala Lumpur. The contract had reached 3,766 ringgit on Dec 14, the

highest level in 33 months.

Malaysian exports fell 24 per cent in

the first 15 days of December, surveyor Intertek said yesterday.

Shipments slumped 29.5 per cent in the same period, according to an

estimate from rival Societe Generale de Surveillance.

“There is a

lack of supportive fundamental news,” Ker Chung Yang, an analyst at

Phillip Futures Pte, said in an e-mail today. “Investors always tend to

stay away from the market with the holidays ahead.”

Palm oil has surged 37 per cent this year, headed for a second annual

advance, on speculation that rising demand from China and India may

strain global supplies that have been curbed by rain and drought in

producing nations.

Output in Malaysia fell to the lowest level in

five months in November, while stockpiles slid for the first time in

four months. Heavy rainfall caused by a La Nina weather event has also

reduced oil-palm yields in Indonesia, the biggest grower.

Malaysian

production declined 11 percent to 1.46 million tons last month from

1.64 million tons in October, according to data from the nation’s palm

oil board. Inventory dropped 8.7 percent to 1.64 million tons from 1.79

million tons.

India, the second-biggest cooking-oil consumer,

imported 668,917 tons of vegetable oils last month, 11 percent less than

a year earlier, the Solvent Extractors’ Association of India said on

Dec 13. – Bernama

Source : Business Times

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