KUALA LUMPUR: Palm oil dropped to a two-month low, heading for a second weekly loss, after data showed exports from Malaysia fell and on concern that Europe’s debt crisis may worsen, damping investor demand for commodities.
The July-delivery contract lost as much as 1.4% to 3,303 ringgit or US$1,075 a metric ton on the Malaysia Derivatives Exchange, the lowest level since March 8, before trading at 3,311 ringgit at 12:14 p.m. in Kuala Lumpur. Prices are set for a 1.4% drop this week, after a 4.2% loss last week.
Shipments declined 6% to 450,269 tons in the first 10 days of May from the same period a month earlier, Intertek said. Exports fell 14% to 419,364 tons in the same period, estimated Societe Generale de Surveillance. Commodities fell for an eighth day, wiping out gains for the year, on concern that turmoil in Greece may worsen Europe’s crisis and as JPMorgan Chase & Co. said it had a US$2 billion trading loss on derivatives.
“Demand is anemic,” said Paramalingam Subramaniam, director of Kuala Lumpur-based brokerage Pelindung Bestari Sdn. The “macro uncertainties in the European Union” are weighing on prices, he said in an e-mail.
Greece has been unable to form a government since the May 6 elections, stoking concerns over the country’s ability to hold to the terms of its two bailouts negotiated since May 2010 and about the nation leaving the currency union. Crude oil, copper and gold headed for second weekly declines and equities fell after Jamie Dimon, chief executive at the biggest US bank by assets, said the lender made egregious mistakes.
Palm oil for September delivery retreated 1.5% to 8,524 yuan or US$1,349 a ton on the Dalian Commodity Exchange. (Bloomberg/T03/aph)