Palm oil fell for a second day on speculation that stockpiles in Malaysia, the world’s second- biggest producer after Indonesia, may climb as exports decline.
The contract for delivery in June dropped as much as 1.1 percent to 2,436 ringgit ($787) a metric ton on the Malaysia Derivatives Exchange, and ended the morning session at 2,438 ringgit in Kuala Lumpur. Futures gained 3.3 percent last week, closing at 2,493 ringgit, the highest price since Feb. 22.
Exports from Malaysia fell 7.5 percent to 1.07 million tons in the first 25 days of this month from the same period in February, surveyor Intertek said yesterday. Shipments had been 11 percent higher during the first 20 days of the month, according to the surveyor. Inventories were 2.44 million tons in February after reaching a record 2.63 million tons in December, according to Malaysian Palm Oil Board.
“Prices are falling on expectation that the inventories will start to move up again by the end of May,” Ryan Long, a vice president of futures and options at OSK Investment Bank Bhd., said by phone from Kuala Lumpur. “I don’t expect any kind of exceptional Malaysian exports. Even with a higher tax Indonesia still manages to sell the oil at a cheaper price.”
Stockpiles will be more than 2 million tons at the end of March as production may expand, he said.
Soybean oil for May delivery dropped 0.3 percent to 50.31 cents a pound on the Chicago Board of Trade, while soybeans for May was little changed at $14.365 a bushel.
Refined palm oil for September delivery fell 0.6 percent to 6,376 yuan ($1,026) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month was little changed at 8,098 yuan a ton.
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Source : Bloomberg