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Palm Oil Posts Biggest Price Decline Since September
Swansy Afonso | December 12, 2011

Palm oil fell the most in more than two months on concern rising soybean stockpiles will boost global vegetable oil supplies and as exports fell from Malaysia, the second-biggest producer. (AFP Photo) Palm oil fell the most in more than two months on concern rising soybean stockpiles will boost global vegetable oil supplies and as exports fell from Malaysia, the second-biggest producer. (AFP Photo)
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Palm oil fell the most in more than two months on concern rising soybean stockpiles will boost global vegetable oil supplies and as exports fell from Malaysia, the second-biggest producer.

The February-delivery contract dropped 2.8 percent, the most since Sept. 26, to 2,998 ringgit ($949) per metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures gained 0.7 percent last week.

Global soybean reserves will be 1.5 percent bigger than last month’s estimate and US stockpiles will rise 15 percent to a five-year high, the US Department of Agriculture said on Dec. 9. The forecast for US exports was cut to 1.3 billion bushels from 1.325 billion in November. That compares with 1.501 billion bushels in the previous year.

“Palm oil is reacting as a spill-over effect to the lower close in Chicago after the USDA reported higher soybean stockpiles,” Ryan Long, vice president of futures and options at OSK Holdings in Kuala Lumpur, said.

January-delivery soybeans fell on Dec. 9 by as much as 2.9 percent to $11.0025 a bushel on the Chicago Board of Trade, the lowest price for a most-active contract since Oct. 8, 2010.

“Rains in Argentina and Brazil’s soybean areas have also been favorable for planting,” said Chandran Sinnasamy, trading head at Kuala Lumpur-based LT International Futures.

Palm oil exports from Malaysia fell 5.1 percent to 443,699 tons in the first 10 days of December from the same period a month earlier, surveyor Intertek said on Monday.

Bloomberg