Palm oil tumbled by the most in a week on concern that demand for use in biofuels may drop after crude oil prices slumped.
The contract for delivery in May lost 1.1 percent to close at 2,536 ringgit ($815) a metric ton on the Malaysia Derivatives Exchange, the biggest fall since Feb. 13. That pared gains to 4 percent this year.
Crude oil lost as much as 1.8 percent in New York as an estimate showed that U.S. stockpiles gained and the U.S. Federal Reserve signaled it may pare back stimulus. The contract for April delivery was last at $93.92 a barrel.
“Demand for biodiesel may be lower” after the decline in crude prices, Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., said by phone. “The selling price of biodiesel may be lower.”
Several participants at the Federal Open Market Committee’s Jan. 29-30 meeting “emphasized that the committee should be prepared to vary the pace of asset purchases,” according to minutes released yesterday. Commodities as tracked by the Standard & Poor’s GSCI Index fell as much as 1.1 percent today.
Demand for palm oil may also be lower during the winter season, according to Lim, who expects exports from Malaysia to drop about 3 percent this month from 1.62 million tons in January. The tropical oil clouds in cooler temperatures.
Exports from Malaysia, the largest producer after Indonesia, rose 0.6 percent to 835,612 tons in first 20 days of February from the same period a month earlier, Intertek said yesterday. Shipments rose 18 percent in the first 15 days, it said Feb. 15.
Refined palm oil for delivery in September lost 1.4 percent to close at 7,024 yuan ($1,126) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month retreated 1.4 percent to end at 8,630 yuan a ton.
Soybeans for May delivery dropped 0.4 percent to $14.62 a bushel on the Chicago Board of Trade. Soybean oil for May delivery declined 0.7 percent to 52.06 cents a pound.
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