MARKET DEVELOPMENT
Palm Oil Drops as Demand From India Seen Slowing on Weak Rupee
Palm Oil Drops as Demand From India Seen Slowing on Weak Rupee
04/06/2013 (Bloomberg) - Palm oil fell on speculation that demand may slow from India, the world’s biggest buyer, and as Malaysia’s currency advanced the most in almost a month against the dollar, reducing the appeal of ringgit-denominated futures.
The contract for August delivery dropped as much as 0.8 percent to 2,376 ringgit ($768) a metric ton on the Bursa Malaysia Derivatives, and ended the morning session at 2,378 ringgit. Palm for physical delivery in June was at 2,360 ringgit yesterday, according to data compiled by Bloomberg.
India’s rupee touched an 11-month low yesterday on concern that the U.S. Federal Reserve will scale back asset purchases that have spurred fund flows into emerging markets. Shipments from Malaysia, the second-largest producer, to India dropped 14 percent to 163,650 tons in May from a month earlier, Societe Generale de Surveillance said on May 31.
“Demand from India is slightly low due to the rupee,” Vijay Mehta, a director of Commodity Links Pte., said from Singapore. “The buying momentum is slightly missing.”
The ringgit strengthened today after an unexpected decline in U.S. manufacturing reduced speculation that the government will roll back its stimulus. The ringgit gained as much as 0.5 percent to 3.0831 per dollar, the most since May 8, according to data compiled by Bloomberg.
“When you have a stronger ringgit, this means that exports will be pricier and this will affect the demand,” said Sim Han Qiang, an analyst at Phillip Futures Pte. in Singapore.
Soybean oil for July dropped 0.6 percent to 48.37 cents a pound on the Chicago Board of Trade, while soybeans fell 0.7 percent to $15.2125 a bushel. Refined palm oil for September delivery retreated 1.6 percent to 6,096 yuan ($995) a ton on the Dalian Commodity Exchange, while soybean oil lost 1.4 percent to 7,414 yuan.
The contract for August delivery dropped as much as 0.8 percent to 2,376 ringgit ($768) a metric ton on the Bursa Malaysia Derivatives, and ended the morning session at 2,378 ringgit. Palm for physical delivery in June was at 2,360 ringgit yesterday, according to data compiled by Bloomberg.
India’s rupee touched an 11-month low yesterday on concern that the U.S. Federal Reserve will scale back asset purchases that have spurred fund flows into emerging markets. Shipments from Malaysia, the second-largest producer, to India dropped 14 percent to 163,650 tons in May from a month earlier, Societe Generale de Surveillance said on May 31.
“Demand from India is slightly low due to the rupee,” Vijay Mehta, a director of Commodity Links Pte., said from Singapore. “The buying momentum is slightly missing.”
The ringgit strengthened today after an unexpected decline in U.S. manufacturing reduced speculation that the government will roll back its stimulus. The ringgit gained as much as 0.5 percent to 3.0831 per dollar, the most since May 8, according to data compiled by Bloomberg.
“When you have a stronger ringgit, this means that exports will be pricier and this will affect the demand,” said Sim Han Qiang, an analyst at Phillip Futures Pte. in Singapore.
Soybean oil for July dropped 0.6 percent to 48.37 cents a pound on the Chicago Board of Trade, while soybeans fell 0.7 percent to $15.2125 a bushel. Refined palm oil for September delivery retreated 1.6 percent to 6,096 yuan ($995) a ton on the Dalian Commodity Exchange, while soybean oil lost 1.4 percent to 7,414 yuan.