Palm oil retreated for a second day on concern that exports from Malaysia, the world’s second-largest producer, may decline as a rally in the ringgit and weakening crude oil prices curb demand.
The contract for delivery in February, the most-active by volume, fell as much as 0.9 per cent to RM2,569 a metric tonne on the Bursa Malaysia Derivatives and ended the morning session at RM2,573 in Kuala Lumpur.
Exports from Malaysia dropped 4.6 per cent to 744,975 tonnes in the first 15 days of November from the same period a month earlier, surveyor Intertek said on November 15. The ringgit has gained 0.7 per cent against the dollar in the past week, lowering the appeal of commodities priced in the Malaysian currency.
"The recent strengthening of the ringgit against the greenback has discouraged some purchases by overseas buyers and refiners," Tan Chee Tat, an analyst at Phillip Futures Pte, said by phone from Singapore. "Another reason is the weakness in crude oil prices as this causes palm oil to lose some demand in biodiesel usage."
West Texas Intermediate oil for delivery in December traded near a five-month low at US$92.93 a barrel in electronic trading on the New York Mercantile Exchange today. Palm oil, used in everything from candy to biofuels, entered a bull market this month and is heading for its first annual gain in three years as production declines in Indonesia, the biggest supplier.
"Prices have rallied quite a bit in a short span of time and this has enticed some investors to book profits," Tan said.
Soybean oil for January delivery increased 0.3 per cent to 40.47 cents a pound on the Chicago Board of Trade. Soybeans were little changed at US$12.8925 a bushel.
Refined palm oil for May delivery advanced 0.3 per cent to 6,260 yuan (US$1,027) a tonne on the Dalian Commodity Exchange and soybean oil was little changed at 7,184 yuan.-- Bloomberg
