KUALA LUMPUR: Palm oil exports from Malaysia, the world’s biggest producer after Indonesia, slumped the most in seven years in January as a plunge in energy prices and record cut in global oilseed supply demand.
Sales decreased 22 percent to 1.18 million metric tons from a month earlier, the Malaysia Palm Oil Board said in Kuala Lumpur on Tuesday. That’s the biggest drop since January 2008 and the least shipped since February 2011, MPOB data show. The median estimate in a Bloomberg survey published Feb. 6 was for a 15 percent decline to 1.29 million tons. Imports fell 0.5 percent to 89,908 tons, according to board data.
Palm oil, used in food and fuel, lost 12 percent in the past year as a plunge in petroleum costs reduced its allure as a biodiesel feedstock and global soybean crops headed for an all-time high. Soybean oil fell to a six-year low last month, increasing its attraction as an alternative. Demand may shift to soybean oil, DBS Bank Ltd. wrote in a report dated Jan. 27.
“Exports disappointed significantly on the downside and that says to me that on the demand side people are struggling with paying palm oil prices at these levels,” Wayne Gordon, a Singapore-based commodities analyst at UBS Group AG, said by phone Feb. 10. “There’s a bit of an arm wrestle with soyoil. Palm oil price has to decline to buy demand.”
Futures fell 0.7 percent to close at 2,300 ringgit ($642) a ton on Bursa Malaysia Derivatives in Kuala Lumpur. Soybean oil fell to 29.32 cents a pound on Jan. 29, the lowest since December 2008 and has narrowed it’s premium over palm to about $56 a ton from an average of $155 in the past five years.
