28.12.2020 (www.bloomberg.com) - Palm oil retreated from an eight-year high on concerns that shipments from second-biggest grower Malaysia may dwindle next month amid weaker Chinese demand.
The tropical oil reversed morning gains to fall as much as 1.5%, snapping a three-day rally that powered futures on Thursday to their highest level since April 2012. Palm is still up 16% so far this year.
Futures opened higher following a rise in Chicago soybean oil, but were unable to hold gains on worries that January shipments will be subdued because of high prices and as China demand continues weaker due to poor import margins, according to Anilkumar Bagani, research head at Mumbai-based Sunvin Group.
Although Malaysian exports in December could climb to 1.6 million tons, the stronger shipments, as well as a likely reduction in production and stockpiles, are mostly priced in, Bagani said. The market is now looking at external factors, such as strikes by workers at soybean export plants in Argentina and market optimism related to the Covid-19 vaccine, he said.
Indonesia’s move to raise its export tax on crude palm oil for January may underpin the market, Bagani said.
Malaysia’s palm oil exports jumped 17% from a month earlier to 1.34 million tons during December 1-25 , according to cargo surveyor AmSpec Agri.