Palm oil dropped the most in more than a year on speculation China, the biggest cooking-oil user, may slow purchases after prices climbed to the highest level in more than two years. The January-delivery contract slumped as much 3.5 percent to 3,277 ringgit ($1,053) a metric ton, the most since Oct. 2, 2009, and ended the morning session on the Malaysia Derivatives Exchange at 3,305 ringgit. January-delivery soybean oil tumbled as much as 4.5 percent to 52.85 cents a pound in Chicago, the most since Dec. 17. Palm oil’s decline mirrored losses in other commodities. Cotton, sugar and rubber futures tumbled by the daily limit in China as gains to records were seen as excessive and on concern the country may step up efforts to cool inflation, possibly lowering demand. Copper and zinc also slid. “China may slow imports of soybeans until March after stocking up enough,” said Ben Santoso, an analyst at DBS Vickers Securities Singapore. “The weakness in soybean oils will reflect in palm oil, which won’t be in great demand during winter months” as the tropical oil clouds in cooler climes. China’s soybean imports fell 19.6 percent to 3.73 million tons in October from the previous month on a seasonal decline in global supply, according to customs data released Nov. 10. Palm oil has rallied for 11 weeks, the best winning streak since June, 2007, on concern global edible oils supplies will be tight after the U.S. said soybean supplies may be smaller than forecast and production fell in Malaysia. Palm and soybean oils are direct substitutes. ‘One-way Rally’ Output in Malaysia, the biggest palm-oil producer after Indonesia, dropped to 14.3 million tons in the 10 months ended Oct. 31, from 14.5 million tons, the nation’s palm oil board said Nov. 10. Soybean inventories before next year’s harvest will be 30 percent less than forecast last month, the U.S. Department of Agriculture said this week. “Some correction was expected in palm oil after the one- way rally and it’s been mostly because of the strength in the dollar today and speculation China may take steps to control inflation,” Santoso said. “Palm oil may rebound in the first quarter after some correction this month and next.” In China, palm oil for September delivery plunged as much as 4.4 percent to 9,154 yuan ($1,381) in Dalian. Soybean oil for September delivery shed as much as 3.6 percent to 9,992 yuan a ton. CME Group Inc.’s January palm oil contract, pegged to the Malaysian benchmark price, fell as much as 0.5 percent to $1,079.5 a ton and traded at $1,080.75 at 12:03 p.m. To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net. To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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