PALM oil declined to head for a fourth quarterly loss on concern that demand for the most- consumed edible oil will weaken as Europe’s debt crisis drags on.
The contract for delivery in June lost as much as 1.5 per cent to RM2,411 (US$777) a metric tonne, the lowest level since March 19, on the Malaysia Derivatives Exchange in Kuala Lumpur.
Most-active prices traded at RM2,420 at the midday break, 0.7 per cent lower this year.
A fourth quarterly loss would be the worst streak since 1999.
Cyprus’s banks reopened yesterday for the first time in almost two weeks, with new rules curbing customers’ access to cash after a bailout this week probably averted a financial collapse.
Europe is the largest buyer of palm after India and China, US Department of Agriculture data showed.
The region’s economy would contract for a second straight year in 2013, according to the median of analysts’ forecasts tracked by Bloomberg.
Global market concerns “over the possible impact of capital controls in Cyprus have downward pressure on crude palm oil,” said Sim Han Qiang, an investment analyst at Phillip Futures in Singapore.
Palm oil has dropped 30 per cent over the past year as supplies from Malaysia and Indonesia, the largest producers, expanded to a record and demand fell in Europe.
Stockpiles in Malaysia reached an all-time high in December.
Refined palm oil for September delivery fell as much as 1.8 per cent to 6,304 yuan (US$1,014) a tonne on the Dalian Commodity Exchange, and was at 6,306 yuan.
Soybean oil for delivery in the same month lost one per cent to 8,058 yuan a tonne.
Soybean oil for May delivery dropped 0.4 per cent to 50.61 cents a pound on the Chicago Board of Trade, while soybeans for delivery in May traded declined 0.3 per cent to US$14.4925 a bushel. — Bloomberg