MARKET DEVELOPMENT
Palm Oil Drops for Fifth Day as China’s Slowdown May Cut Demand
Palm Oil Drops for Fifth Day as China’s Slowdown May Cut Demand
17/07/2013 (Bloomberg) - Palm oil dropped for a fifth day to trade near the lowest level in more than two months on speculation that demand from China, the world’s biggest buyer after India, may weaken as an economic slowdown deepens.
The contract for September delivery, with the most open interest, retreated as much as 0.7 percent to 2,258 ringgit ($710) a metric ton on the Bursa Malaysia Derivatives, and was at 2,263 ringgit at 12:08 p.m. in Kuala Lumpur. Futures touched 2,234 ringgit yesterday, the lowest level for the most-active futures since May 6. Palm for local physical delivery in August was at 2,310 ringgit yesterday, data compiled by Bloomberg show.
Expansion in China’s gross domestic product decelerated to 7.5 percent last quarter from 7.7 percent in the three months through March 31. Growth in developing economies in Asia will be weaker than initially estimated this year and next amid a slower expansion in China (CNGDPYOY) and lackluster export demand from advanced nations, the Asian Development Bank said today.
“This news is weighing on prices because China is obviously a big market,” said Arhnue Tan, an analyst with Alliance Investment Bank Bhd. “China takes up about 20 percent of Malaysia’s total exports, so its actually very significant.”
Shipments from Malaysia, the largest producer after Indonesia, fell 23 percent to 547,857 tons in the first 15 days of July from the same period in June, surveyor Intertek said yesterday. Exports dropped 24 percent, with shipments to China declining 37 percent in the first half of this month, according to SGS (Malaysia) Sdn.
Refined palm oil for January delivery was little changed at 5,646 yuan ($920) a ton on the Dalian Commodity Exchange, after closing at the lowest price for the most-active contract since July 2009 yesterday, while soybean oil for delivery in the same month was also little changed at 7,180 yuan.
Soybean oil for delivery in December was little changed at 45.31 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November gained 0.3 percent to $12.6775 a bushel.
The contract for September delivery, with the most open interest, retreated as much as 0.7 percent to 2,258 ringgit ($710) a metric ton on the Bursa Malaysia Derivatives, and was at 2,263 ringgit at 12:08 p.m. in Kuala Lumpur. Futures touched 2,234 ringgit yesterday, the lowest level for the most-active futures since May 6. Palm for local physical delivery in August was at 2,310 ringgit yesterday, data compiled by Bloomberg show.
Expansion in China’s gross domestic product decelerated to 7.5 percent last quarter from 7.7 percent in the three months through March 31. Growth in developing economies in Asia will be weaker than initially estimated this year and next amid a slower expansion in China (CNGDPYOY) and lackluster export demand from advanced nations, the Asian Development Bank said today.
“This news is weighing on prices because China is obviously a big market,” said Arhnue Tan, an analyst with Alliance Investment Bank Bhd. “China takes up about 20 percent of Malaysia’s total exports, so its actually very significant.”
Shipments from Malaysia, the largest producer after Indonesia, fell 23 percent to 547,857 tons in the first 15 days of July from the same period in June, surveyor Intertek said yesterday. Exports dropped 24 percent, with shipments to China declining 37 percent in the first half of this month, according to SGS (Malaysia) Sdn.
Refined palm oil for January delivery was little changed at 5,646 yuan ($920) a ton on the Dalian Commodity Exchange, after closing at the lowest price for the most-active contract since July 2009 yesterday, while soybean oil for delivery in the same month was also little changed at 7,180 yuan.
Soybean oil for delivery in December was little changed at 45.31 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November gained 0.3 percent to $12.6775 a bushel.