Palm oil fell as crude oil traded near the lowest price in more than a week on rising stockpiles in the U.S., reducing the appeal of biofuels.
The contract for delivery in June dropped 0.2 percent to close at 2,392 ringgit ($777) a metric ton on the Malaysia Derivatives Exchange. Prices have tumbled 33 percent in the past year as stockpiles expanded amid slowing demand.
West Texas Intermediate crude futures were little changed at $94.42 a barrel in New York today after dropping 2.8 percent yesterday, the most since November. U.S. crude supplies rose by 2.7 million barrels to 388.6 million last week, the most since 1990, the Energy Information Administration said in a report.
“Biodiesel demand may be affected if the decline in crude oil continues,” said Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd. Palm oil is the world’s most-consumed cooking oil and is also used in biofuels.
Palm oil imports by India, the biggest consumer, may slow as the local mustard crop comes into the market, said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai. Malaysia’s palm oil shipments to India dropped 49 percent to 81,142 tons last month from 158,250 tons in February, according to estimates by surveyor Societe Generale de Surveillance.
Soybean oil for May delivery gained 0.2 percent to 49.23 cents a pound on the Chicago Board of Trade, while soybeans for May was little changed at $13.7925 a bushel.
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