MUMBAI: Palm oil dropped for a second day on speculation that output will climb in Malaysia, the second- largest producer, boosting global cooking-oil inventories.
The September-delivery contract on the Malaysia Derivatives Exchange declined as much as 0.8% to 2,991 ringgit or US$938 a metric ton and was at 3,009 at the close of the morning session in Kuala Lumpur.
In May, output rose 8.7% to 1.38 million tons from April, the Malaysian Palm Oil Board said June 11. Output this year will reach 19 million tons as the harvest reaches its height in coming months, Choo Yuen May, director-general of the board, said June 7. Output peaks between July and October.
“Palm oil is moving into the high production season,” said Ivy Ng, an analyst with CIMB Group Holdings Bhd. in Kuala Lumpur. The market is also focusing on US soybean planting.
The share of the US soybean crop that had the top ratings dropped to 53%, from 56% a week earlier due to dry and hot weather in the growing areas, according to the US Department of Agriculture. The agency will release crop acreage planted data tomorrow.
Palm oil for January delivery declined 0.3% to 7,978 yuan US$1,254 a ton on the Dalian Commodity Exchange. (Bloomberg/T03)