MARKET DEVELOPMENT
Palm Oil Drops to Two-Month Low as Chinese Demand Seen Falling
Palm Oil Drops to Two-Month Low as Chinese Demand Seen Falling
16/07/2013 (Bloomberg) - Palm oil slumped to the lowest in more than two months as exports dropped amid speculation that a slowdown in China’s economy may damp demand from the world’s second-largest consumer after India.
The contract for September delivery retreated as much as 1.8 percent to 2,260 ringgit ($710) a metric ton on the Bursa Malaysia Derivatives, the lowest level for the most-active futures since May 7, and ended the morning trading session at 2,267 ringgit in Kuala Lumpur. Palm for local physical delivery in August was at 2,320 ringgit, data compiled by Bloomberg show.
Shipments from Malaysia, the second-largest producer, fell 23 percent to 547,857 in the first 15 days of July from same period in June, surveyor Intertek said today. China’s economy slowed for a second quarter as gains in factory output decelerated, and is at risk of weakening further as the government reins in credit expansion to reduce the danger of a financial crisis.
“With this general pessimism about demand for crude palm oil, prices are trending down,” said Sim Han Qiang, an analyst at Phillip Futures Pte in Singapore. “If China’s economy is likely to slow going forward, that will also translate to weaker demand for crude palm oil. We believe the trend is still down and futures are likely to test 2,200 ringgit.”
Malaysia left the tax on crude palm oil exports unchanged for a sixth month in August at 4.5 percent, according to a Customs Department statement.
Soybean oil for delivery in December declined 0.8 percent to 45.37 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November gained 0.2 percent to $12.6025 a bushel. Refined palm oil for January delivery fell as much as 2.8 percent to 5,656 yuan ($922) a ton on the Dalian Commodity Exchange, the lowest price for the most-active contract since September 2009, while soybean oil for delivery in the same month dropped 1.1 percent to 7,204 yuan.
The contract for September delivery retreated as much as 1.8 percent to 2,260 ringgit ($710) a metric ton on the Bursa Malaysia Derivatives, the lowest level for the most-active futures since May 7, and ended the morning trading session at 2,267 ringgit in Kuala Lumpur. Palm for local physical delivery in August was at 2,320 ringgit, data compiled by Bloomberg show.
Shipments from Malaysia, the second-largest producer, fell 23 percent to 547,857 in the first 15 days of July from same period in June, surveyor Intertek said today. China’s economy slowed for a second quarter as gains in factory output decelerated, and is at risk of weakening further as the government reins in credit expansion to reduce the danger of a financial crisis.
“With this general pessimism about demand for crude palm oil, prices are trending down,” said Sim Han Qiang, an analyst at Phillip Futures Pte in Singapore. “If China’s economy is likely to slow going forward, that will also translate to weaker demand for crude palm oil. We believe the trend is still down and futures are likely to test 2,200 ringgit.”
Malaysia left the tax on crude palm oil exports unchanged for a sixth month in August at 4.5 percent, according to a Customs Department statement.
Soybean oil for delivery in December declined 0.8 percent to 45.37 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November gained 0.2 percent to $12.6025 a bushel. Refined palm oil for January delivery fell as much as 2.8 percent to 5,656 yuan ($922) a ton on the Dalian Commodity Exchange, the lowest price for the most-active contract since September 2009, while soybean oil for delivery in the same month dropped 1.1 percent to 7,204 yuan.