Palm oil and soybean oil, mostly used in food, often follow crude prices as vegetable oils can be used for biofuel. Crude for August delivery dropped 2.7 per cent in New York yesterday, while soybean oil tumbled 3.6 per cent in Chicago as improved weather in the US may help oilseed crops recover from Midwest flooding. The decline "is because of a slowdown in demand,'' Liliana Bambang, an analyst at PT Mandiri Sekuritas in Jakarta, said.
Palm oil for September delivery dropped 58 ringgit, or 1.65 per cent, to 3,454 ringgit ($1,059) a metric ton, the lowest since June 4, on the Malaysia Derivatives Exchange. The contract lost 3.3 per cent yesterday.
The most-active contract has gained 33 per cent in the past year, reaching a record 4,486 ringgit on March 4. This compares with soybean oil's advance of 73 per cent in the period, making the latter 38 per cent more expensive than palm on Thursday.
Soybean oil for December delivery was down 0.9 per cent to 65.93 cents a pound in after-hours trading on the Chicago Board of Trade. It hasn't closed below 66 cents since June 25. Prices reached a record 72.69 cents on March 4.
Traders are focusing on Malaysia's June palm oil stockpile to be released on July 10. Inventory climbed 7 per cent to 1.91 million tonnes in May from April to the highest since the February record of 1.93 million tonnes, the Malaysian Palm Oil Board said June 10.
Indonesian Tenders
The Indonesian state marketing center accepted bids for 7,000 tonnes out of 9,000 tonnes of palm oil offered in a tender on Thursday, Aziz Kahar, head of sales, said from Jakarta.
The center sold 1,500 tonnes ex-factory from Medan and 3,000 tonnes free-on-board Belawan port in North Sumatra to PT Musim Mas at 8,861 rupiah per kg ($962 a tonne),
PT Inti Benua Perkasatama bought 1,000 tonnes of palm oil at 8,861 rupiah a kg, free-on-board, from Dumai and 1,000 tonnes free-on-board from Siak port in Riau province at 8,771 rupiah, and a further 500 tonnes ex-factory from Pinang Tingi at 8,601 rupiah, he said.
The center, which markets palm oil from state plantations, accepted bids from 8,793 rupiah to 9,008 rupiah per kg in yesterday's tender.
