Palm oil fell on concern that higher energy costs may threaten the global economy recovery and cool demand for commodities after Libya’s violent uprising spread to other parts of the Middle East.
The May-delivery contract declined 1.2 percent to 3,472 ringgit ($1,139) a metric ton, after advancing 2.2 percent in intraday trading in Kuala Lumpur. Futures shed 8.8 percent for February, ending seven straight months of gains.
Crude oil advanced as the civil unrest that has swept the Middle East, ignited by the ouster of Tunisia’s president and the fall of Egyptian President Hosni Mubarak, yesterday spread to Oman, which produces about 800,000 barrels of oil a day. Libyan leader Muammar Qaddafi has vowed to fight the uprising against his more than four-decade rule as army units and diplomats defect, leaving much of the nation’s east coast in the hands of the opposition.
“The fear that the political unrest may spillover to other Arabian countries lingers,” said Ker Chung Yang, an analyst at Phillip Futures Pte, in an e-mail today. “This may curb demand for oilseeds. Crude palm oil prices could be dragged down.”
Malaysia’s palm oil exports fell 10.4 percent in February to 1,110,672 tons from a month ago, market surveyor Intertek said today. Shipments slumped 9.1 percent, according to rival Societe Generale de Surveillance.
“Crude palm oil prices will not see further increases from here but taper off closer to 3,000 ringgit before dipping below that,” Bernard Ching, an analyst with ECM Libra Capital Sdn., said in a report today.
Soybeans for May delivery advanced 3.4 percent on Feb. 25, the largest gain since Jan. 12, and closed at $13.75 a bushel. The contract fell as much as 1 percent to $13.61 today.
Libya Oil Supply
Crude oil posted the biggest weekly gain in two years last week amid estimates that Libya’s crude flow was cut by as much as two-thirds. Futures for April delivery climbed to as high as $99.96 a barrel in after-hours trading in New York. Palm and soybean oils are substitutes in food and fuel uses, and prices can be influenced by shifts in energy costs.
Libyan crude output has been cut by more than 1 million barrels a day, Barclays Capital said. The International Energy Agency said output was down by at least 850,000 barrels. Libya pumped 1.6 million barrels a day in January, the ninth-largest producer among the 12 members of the OPEC.
September-delivery palm oil on the Dalian Commodity Exchange rose 1.4 percent to close at 9,456 yuan ($1,439) a ton. Soybean oil for delivery in the same month climbed 1.6 percent to 10,198 yuan at the close. CME Group Inc.’s most-active June palm-oil contract, pegged to the Malaysian benchmark price, lost 3.1 percent to $1,143.25 a ton. |
