Palm Oil Posts Worst Start to Year Since 2010 as Demand Slows

Date:2016-02-20/ Industry news/ Chat Online
Palm oil capped the biggest January decline since 2010 as demand weakens amid a supply glut.
Futures dropped 5.3 percent this month, the most since November, as a slump in exports from Malaysia, the largest producer after Indonesia, signals a slowdown in demand. Output in the two top suppliers is set to climb to a record this year.
Palm oil, used in food and fuel, slumped 16 percent in the past year as a plunge in petroleum costs reduced its allure and global soybean crops headed for an all-time high. Soybean oil fell to a six-year low on Thursday, increasing its attraction as an alternative. Slowing world economies may further hurt demand.
Futures dropped as much as 1.3 percent to 2,106 ringgit ($580) a metric ton on the Bursa Malaysia Derivatives, the lowest in more than a month, before closing 0.6 percent higher at 2,147 ringgit. Soybean oil tumbled to 29.32 cents a pound in Chicago on Thursday, the lowest since 2008.
Palm rallied to 2,394 ringgit about two weeks ago, the highest since July, as floods in Malaysia disrupted production. The advance was aided by a weakening ringgit, which touched a five-year low against the dollar on Thursday.
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