Palm oil tumbled the most in almost two weeks on speculation that exports may decline from Malaysia after the world’s second-largest producer left a tax on shipments unchanged for a fourth month.
The contract for July delivery slid as much as 1.1 percent to 2,277 ringgit ($759) a metric ton on the Bursa Malaysia Derivatives, the biggest decline for the most-active futures since May 2, and was at 2,280 ringgit at 12:22 p.m. in Kuala Lumpur. Futures have lost 6 percent this year.
Crude palm oil exports will be taxed at 4.5 percent in June as the reference price was set at 2,332.02 ringgit, within the minimum band for a levy to be applied, according to a statement from Malaysia’s Customs Department. Shipments from Malaysia fell 7.6 percent to 599,300 tons in the first 15 days of this month from a month earlier, surveyor Intertek said today.
“The tax won’t give any edge to Malaysian sellers as prices are still higher than Indonesian shipments,” Vijay Mehta, a director of Commodity Links Pte., said by phone from Singapore. “Exports could recover a bit in the second half of this month as Ramadan demand will pick up from early June.”
Consumption usually increases during the Muslim fasting month of Ramadan, boosting purchases from the Middle East to South Asia including India, the world’s biggest buyer.
Refined palm oil for September delivery fell 2 percent to 5,990 yuan ($975) a ton on the Dalian Commodity Exchange, while soybean oil dropped 1.6 percent to 7,378 yuan. On the Chicago Board of Trade, soybeans for July delivery was little changed at $14.1375 a bushel and soybean oil for same month declined 0.5 percent to 49.49 cents a pound.
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Source : Bloomberg