Palm oil declined the most in more than a week on concern that the highest price in almost 18 months may weaken demand for the tropical oil used in everything from food to fuel.
The contract for May delivery retreated as much as 1.1 percent to 2,870 ringgit ($876) a metric ton on Bursa Malaysia Derivatives, the biggest decline for futures since Feb. 27, and ended the morning session at 2,891 ringgit in Kuala Lumpur.
Futures jumped to the highest level since September 2012 yesterday after data showed that output in Malaysia, the world’s second-biggest producer, dropped last month to the lowest since April 2012 as dry weather threatened to hurt crops. Exports from Malaysia fell 5 percent to 293,879 tons in the first 10 days of this month from the same period in February, surveyor Intertek said yesterday.
“Prices are down mainly due to profit-taking especially after prices climbed sharply yesterday,” said Chee Tat Tan, an analyst with Phillip Futures Pte., by phone from Singapore. “Outlook still remains bullish because of production concerns.”
Weather during the next two to three weeks will be crucial for palm oil areas in Malaysia and Indonesia and rain is required after a period of dryness, Maybank Kim Eng Securities Pte said in a report today. Prolonged dryness will impact yields in the last quarter of this year, it said.
Soybean oil for delivery in May was little changed at 43.80 cents a pound on the Chicago Board of Trade, while soybeans slid 0.3 percent to $14.1425 a bushel, extending losses of 2.7 percent yesterday.
Refined palm oil for September delivery fell 0.5 percent to 6,388 yuan ($1,041) a ton on the Dalian Commodity Exchange. Soybean oil dropped 0.6 percent to 7,118 yuan.
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Source : Bloomberg