(For physical price assessments, see MPOI1.)
Oct. 25 (Bloomberg) -- Palm oil retreated the most in four weeks as a report on shipments from Malaysia, the world’s second-largest producer, signaled declining demand and as crude oil headed for the biggest weekly loss since June.
The contract for delivery in January slid 0.8 percent to close at 2,444 ringgit ($780) a metric ton on the Bursa Malaysia Derivatives, the biggest decline for most-active futures since Sept. 26. Palm for physical delivery in November was at 2,455 ringgit today, data compiled by Bloomberg show.
Exports fell 0.6 percent to 1.23 million tons during Oct. 1-25 from a month earlier, said surveyor Intertek. That compares with a 6.6 percent increase in the first 15 days of the month. SGS estimated shipments rose 3.8 percent in the first 25 days, less than growth of 12 percent in the first 15 days. Futures still gained 1.8 percent this week on speculation output in Malaysia may increase at a slower pace.
“Although production is not growing as much as expected, exports are not catching up and this will keep a lid on prices,” said Sandeep Bajoria, chief executive officer of Mumbai-based broker Sunvin Group. “Crude oil prices have also dropped below $100, making palm oil less attractive” as a biofuel feedstock, he said.
WTI for December delivery was at $97.42 a barrel in electronic trading on the New York Mercantile Exchange, set for a 3.3 percent decline this week, the most since June.
Palm oil output will probably expand 3.3 percent to 19.4 million tons this year as yields increase, more trees begin production and oil extraction rates improve, Malaysia’s finance ministry said today in its Economic Report for 2013-2014.
Soybeans for delivery in January fell 0.2 percent to $13.01 a bushel on the Chicago Board of Trade, while soybean oil for December gained 0.1 percent to 41.09 cents a pound.
Refined palm oil for May delivery dropped 0.7 percent to end at 6,084 yuan ($1,000) a ton on the Dalian Commodity Exchange and soybean oil fell 0.9 percent to close at 7,136 yuan.
--With assistance from Ranjeetha Pakiam in Kuala Lumpur. Editors: Ovais Subhani, James Poole