Palm oil had the biggest weekly decline in more than 5 months, on concern that Europe’s worsening crisis may stall global economic growth and cut demand for commodities.
The August-delivery contract closed little changed at 3,096 ringgit ($988) a metric ton on the Malaysia Derivatives Exchange. Futures fell 5.5 percent this week, the most since the five days ended Nov. 25.
Moody’s Investors Service lowered debt ratings at 16 Spanish banks, citing a recession and mounting loan losses. Greece’s credit rating was reduced one level by Fitch Ratings on concern that the country may not be able to sustain membership in the euro area. About $4 trillion has been wiped from global equity markets this month as Europe’s deepening crisis threatens the global recovery.
“There are concerns that investors will hold back purchases in view of the uncertainty,” Ivy Ng, an analyst at CIMB Group Holdings Bhd. (CIMB), said by phone in Kuala Lumpur. “Economies may be growing at a slower rate and demand will be affected as well.”
Palm oil exports from Malaysia, the world’s second-biggest producer after Indonesia, rose 0.7 percent to 599,044 tons in the first 15 days of May from the same period in April, Intertek said May 15. Shipments fell 7 percent to 564,477 tons in the period, estimated Societe Generale de Surveillance.
Soybeans for July delivery dropped 0.6 percent to $14.29 a bushel on the Chicago Board of Trade. Soybean oil for the same month fell 0.9 percent to 50.28 cents a pound. Palm oil and soybean oil are both used in foods and fuels.
Palm oil for September delivery lost 2.2 percent to close at 7,974 yuan ($1,260) a ton on the Dalian Commodity Exchange, the lowest closing price for the most-active contract since Jan. 18. Soybean oil for the same month retreated 1.4 percent to end at 9,188 yuan.
Source: www.bloomberg.com
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