(For physical price assessment, see MPOI1)
Oct. 3 (Bloomberg) -- Palm oil dropped for a second day to a one-week low on speculation that increasing output from Malaysia, the second-largest producer, will add to stockpiles and as a decline in crude oil prices cut its appeal as biofuel.
The contract for December delivery fell 0.4 percent to 2,302 ringgit ($720) a metric ton on the Bursa Malaysia Derivatives, the lowest close for the most-active contract since Sept. 26. Palm for physical delivery in October was at 2,320 ringgit, data compiled by Bloomberg show.
Stockpiles should expand from last month through at least January as supply climbs, according to Dorab Mistry, director at Godrej International Ltd. The U.S. Department of Agriculture has predicted global reserves gaining 17 percent to a record 9.2 million tons in 2013-2014. West Texas Intermediate oil fell after the biggest gain in two weeks as U.S. crude stockpiles increased twice as much as forecast.
“The market is estimating Malaysia’s September end-stock to be above 2 million tons as the production rise is very much,” said Chandran Sinnasamy, head of trading at LT International Futures Sdn. U.S. soybeans harvest and weak crude oil prices are pressuring palm oil, he said.
Soybean oil for delivery in December gained 0.9 percent to 39.72 cents a pound on the Chicago Board of Trade. Soybeans for November delivery climbed 0.6 percent to $12.8075 a bushel.
--Editor: Thomas Kutty Abraham