MARKET DEVELOPMENT
Palm Oil Drops to Six-Week Low as Weak Rupee Curbs Indian Demand
Palm Oil Drops to Six-Week Low as Weak Rupee Curbs Indian Demand
03/07/2013 (Bloomberg) - Palm oil fell to the lowest level in six weeks on concern that a weakening Indian currency may curb imports by the world’s largest consumer.
The contract for September delivery declined 0.2 percent to end at 2,339 ringgit ($739) a metric ton on the Bursa Malaysia Derivatives, the lowest price for the most active futures at close since May 21. Palm for local physical delivery in July was at 2,370 ringgit, data compiled by Bloomberg show.
The rupee fell 4.9 percent last month, the worst performance among 78 global currencies tracked by Bloomberg, as the Federal Reserve signaled it may pare stimulus measures this year. Palm oil exports from Malaysia, the second-largest producer, to India fell 9.7 percent to 147,830 tons last month from May, according to SGS (Malaysia) Sdn.
“Because of the heavy rupee depreciation in such a short time, Indian importers have slowed purchases,” said Sandeep Bajoria, chief executive officer of Mumbai-based Sunvin Group. “Soybean oil’s drop has also created pressure on palm oil.”
Soybean oil futures on the Chicago Board of Trade closed on June 28 at the lowest level since October 2010. Soybean oil and palm oil are substitutes in food and fuel uses. Soybean oil for December delivery was little changed at 45.63 cents a pound while soybeans for delivery in November climbed 0.4 percent to $12.4875 a bushel.
Refined palm oil for January delivery dropped 0.2 percent to close at 5,898 yuan ($962) a ton on the Dalian Commodity Exchange, while soybean oil for delivery in the same month lost 0.3 percent to end at 7,360 yuan.
The contract for September delivery declined 0.2 percent to end at 2,339 ringgit ($739) a metric ton on the Bursa Malaysia Derivatives, the lowest price for the most active futures at close since May 21. Palm for local physical delivery in July was at 2,370 ringgit, data compiled by Bloomberg show.
The rupee fell 4.9 percent last month, the worst performance among 78 global currencies tracked by Bloomberg, as the Federal Reserve signaled it may pare stimulus measures this year. Palm oil exports from Malaysia, the second-largest producer, to India fell 9.7 percent to 147,830 tons last month from May, according to SGS (Malaysia) Sdn.
“Because of the heavy rupee depreciation in such a short time, Indian importers have slowed purchases,” said Sandeep Bajoria, chief executive officer of Mumbai-based Sunvin Group. “Soybean oil’s drop has also created pressure on palm oil.”
Soybean oil futures on the Chicago Board of Trade closed on June 28 at the lowest level since October 2010. Soybean oil and palm oil are substitutes in food and fuel uses. Soybean oil for December delivery was little changed at 45.63 cents a pound while soybeans for delivery in November climbed 0.4 percent to $12.4875 a bushel.
Refined palm oil for January delivery dropped 0.2 percent to close at 5,898 yuan ($962) a ton on the Dalian Commodity Exchange, while soybean oil for delivery in the same month lost 0.3 percent to end at 7,360 yuan.