MARKET DEVELOPMENT
Palm Oil Declines to Three-Week Low on China Growth Concerns
Palm Oil Declines to Three-Week Low on China Growth Concerns
27/06/2013 (Bloomberg) - Palm oil dropped to a three-week low on speculation that slower economic growth in China, the largest buyer after India, may damp demand for the oil used in everything from noodles to biofuel.
The contract for September delivery lost 1.3 percent to 2,380 ringgit ($744) a metric ton on the Bursa Malaysia Derivatives, the lowest price at close for the most-active futures since June 4. Palm for local physical delivery in July was at 2,400 ringgit, data compiled by Bloomberg show.
Goldman Sachs Group Inc. and China International Capital Corp. this week joined banks from Barclays Plc to HSBC Holdings Plc in paring their growth projections below the Chinese government’s 7.5 percent goal for this year. The cuts followed a cash crunch that sent interbank lending rates to records last week. The central bank said it will use tools to safeguard stability in money markets and tight liquidity is set to ease.
“The market remains bearish due to China’s liquidity crisis,” analysts Lee Chen Hoay, Sim Han Qiang and Joyce Liu at Phillip Futures Pte, wrote in a report today. While data showed exports are rising this month, “palm oil is still on a downtrend,” they said.
Shipments from Malaysia, the second-largest producer, rose 9.6 percent to 1.17 million tons in the first 25 days of June from the same period a month earlier, Intertek said yesterday.
Price Decline
Stockpiles are poised to jump 21 percent to a record 9.5 million tons in 2013-2014 and demand will advance 4.4 percent, the least in 12 years, U.S. Department of Agriculture data show. Futures will drop to 2,200 ringgit by the year end, a level last seen in 2009, according to the median of 13 trader, analyst and producer estimates compiled by Bloomberg.
Soybean oil for December delivery fell 0.7 percent to 45.63 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November dropped 0.7 percent to $12.70 a bushel.
Refined palm oil for January delivery declined 0.8 percent to close at 5,878 yuan ($956) a ton on the Dalian Commodity Exchange, while soybean oil lost 1.4 percent to 7,332 yuan.
The contract for September delivery lost 1.3 percent to 2,380 ringgit ($744) a metric ton on the Bursa Malaysia Derivatives, the lowest price at close for the most-active futures since June 4. Palm for local physical delivery in July was at 2,400 ringgit, data compiled by Bloomberg show.
Goldman Sachs Group Inc. and China International Capital Corp. this week joined banks from Barclays Plc to HSBC Holdings Plc in paring their growth projections below the Chinese government’s 7.5 percent goal for this year. The cuts followed a cash crunch that sent interbank lending rates to records last week. The central bank said it will use tools to safeguard stability in money markets and tight liquidity is set to ease.
“The market remains bearish due to China’s liquidity crisis,” analysts Lee Chen Hoay, Sim Han Qiang and Joyce Liu at Phillip Futures Pte, wrote in a report today. While data showed exports are rising this month, “palm oil is still on a downtrend,” they said.
Shipments from Malaysia, the second-largest producer, rose 9.6 percent to 1.17 million tons in the first 25 days of June from the same period a month earlier, Intertek said yesterday.
Price Decline
Stockpiles are poised to jump 21 percent to a record 9.5 million tons in 2013-2014 and demand will advance 4.4 percent, the least in 12 years, U.S. Department of Agriculture data show. Futures will drop to 2,200 ringgit by the year end, a level last seen in 2009, according to the median of 13 trader, analyst and producer estimates compiled by Bloomberg.
Soybean oil for December delivery fell 0.7 percent to 45.63 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November dropped 0.7 percent to $12.70 a bushel.
Refined palm oil for January delivery declined 0.8 percent to close at 5,878 yuan ($956) a ton on the Dalian Commodity Exchange, while soybean oil lost 1.4 percent to 7,332 yuan.