12/05/2012 (Bloomberg) - Palm oil declined by the most in almost five months, for a second weekly loss, after estimates showed that Malaysian exports fell and as concern Europe’s debt crisis may worsen damped demand for commodities.

The July-delivery contract slumped 2.2 percent to close at 3,275 ringgit ($1,060) a metric ton on the Malaysia Derivatives Exchange, the biggest drop for the most-active contract since Dec. 15. Futures dropped 2.5 percent this week, after a 4.2 percent loss last week.

Shipments declined 6 percent to 450,269 tons in the first 10 days of May from the same period a month earlier, Intertek said yesterday. Exports fell 14 percent to 419,364 tons in the same period, Societe Generale de Surveillance estimated.

Commodities fell for an eighth day today, wiping out gains for the year, on concern turmoil in Greece may worsen Europe’s crisis and as JPMorgan Chase & Co. (JPM) (JPM) said it had a $2 billion trading loss on derivatives. Data also showed weaker industrial output in China and India.

“Demand is anemic,” said Paramalingam Subramaniam, a director of Kuala Lumpur-based brokerage Pelindung Bestari Sdn. The “macro uncertainties in the European Union” are weighing on prices, he said in an e-mail.

Greece has been unable to form a government since the May 6 elections, stoking concerns over the country’s ability to hold to the terms of bailouts negotiated since May 2010 and possibility of the nation leaving the currency union.

Europe’s economy will fail to grow this year after nations from Spain to Italy slipped into recession, the European Commission said today. Gross domestic product in the 17-nation euro area will drop 0.3 percent, the commission said, reiterating a February forecast.

Crude oil, copper and gold headed for second weekly declines and equities fell after Jamie Dimon, chief executive officer at JPMorgan, the biggest U.S. bank by assets, said the lender made egregious mistakes leading to the loss.

Soybeans for July delivery fell 1 percent to $14.4025 a bushel on the Chicago Board of Trade. Soybean oil, which competes with palm oil for use in food and fuels, lost 1.63 percent to 52.63 cents per pound.

Palm oil for September delivery slumped 2.5 percent to close at 8,438 yuan ($1,337) a ton on the Dalian Commodity Exchange, the lowest for the most-active contract since March 8 and the biggest drop since October. Soybean oil for the same month fell 1.9 percent to 9,566 yuan.