Palm oil slips on weaker demand

KUALA LAMPUR: Palm oil dropped, extending a second annual loss and snapping a five-day rising streak, as declining exports from Malaysia signalled weaker global demand.

The contract for March delivery lost 2.3% to close at 2,440 ringgit ($798) a tonne on the Malaysia Derivatives Exchange. Futures have lost 23% this year as stockpiles in Malaysia climbed to an all-time high. Exports fell 5.7% to 1.57 million tonne in December from 1.66 million tonne a month earlier, surveyor Intertek said on Monday.

Shipments dropped 7.9% to 1.52 million tonne in the same period, estimated Societe Generale de Surveillance. Exports are generally lower during the winter months as the tropical oil clouds in cooler temperatures. Malaysia is the largest producer after Indonesia.

“This signals weak demand” from the Northern Hemisphere, Alan Lim Seong Chun, an analyst at Kenanga Investment Bank, said by phone in Kuala Lumpur, referring to the export figure. Soya beans for March delivery dropped 1.1% to $14.0225 a bushel on the Chicago Board of Trade. Soya bean oil for delivery in March fell 1.1% to 48.91 cents a pound. Palm oil for May delivery retreated 0.6% to close at 6,922 yuan ($1,111) a tonne on the Dalian Commodity Exchange. Soya bean oil for May lost 0.4% to end at 8,612 yuan a tonne.