Palm oil dropped close to the lowest price in more than seven months as a stronger ringgit eroded the appeal of the commodity amid rising vegetable oils supplies. Futures for September delivery fell as much as 1.4 percent to close at 2,270 ringgit ($705) a metric ton on the Malaysia Derivatives Exchange, the lowest price since Nov. 13. The Malaysian ringgit has advanced 6.4 percent this year, narrowing the price differential between palm and soybean oils in dollars. Palm olein ended last week at $778.50 a ton, and degummed Argentina soybean oil at $772.49, Bloomberg data shows. The ringgit’s advance has coincided with record global oilseed harvests this year on rising soybean production in South America, which would pressure edible oil prices. “The harvesting of the bumper South American soybean crop is completed,” Tan Chi Wei, an analyst with Maybank Investment Bank Bhd., said in Kuala Lumpur. “The adverse impact on prices would be felt in the coming months as the oil from these beans enter the market post-crushing.” Palm oil may average 2,250 ringgit in the second half of the year, he said. The commodity averaged 2,519 ringgit in the first half, according to Bloomberg data. Soybean and palm oils account for more than 60 percent of the world’s edible oils. Investors are looking for cues on production, exports and stockpiles by the Malaysian Palm Oil Board, said Arhnue Tan, a senior analyst at ECM Libra Capital Sdn. The data is usually released on the 10th of each month or the next working day. Malaysia is the second-largest palm oil producer and there’s concern the “stock levels are back on the uptrend since exports look flat and production is recovering,” Tan said. Malaysian Exports June palm oil exports from Malaysia climbed 1.5 percent to 1.35 million tons, cargo surveyor Intertek said on June 30. The gain was 1.2 percent to 1.34 million tons, according to rival Societe Generale de Surveillance. Shipments in May had climbed 6 percent to 1.36 million tons, which helped reduce stockpiles by 3.7 percent to 1.56 million tons, according to official data from the board. CME Group Inc.’s September-delivery palm oil contract, which is pegged to the Malaysian benchmark price, lost 1.5 percent to $712 a ton yesterday. On the Dalian Commodity Exchange, January-delivery palm oil was unchanged at 6,220 yuan ($914) a ton in Shanghai. Soybean oil fell 0.1 percent to 7,332 yuan. To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net

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