March 29 (Bloomberg) -- Palm oil declined to its lowest level in almost two weeks, heading for a fourth quarterly loss, on concern that demand will slow as Europe’s debt crisis lingers, boosting inventories in producing nations.
The contract for delivery in June dropped as much as 0.8 percent to 2,392 ringgit ($775) a metric ton, the lowest most- active price since March 18, on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures traded at 2,396 ringgit at the midday break, down 1.7 percent this quarter. A fourth quarterly loss would be the worst streak since 1999.
Shipments to European Union countries by Malaysia tumbled 18 percent in the first 25 days of March to 155,870 tons from a month earlier, according to Societe Generale de Surveillance.
Total exports fell 7 percent to 1.1 million tons, it said March 25. Europe is the largest buyer of palm after India and China, U.S. Department of Agriculture data show. The region’s economy will contract for a second straight year in 2013, according to the median of analysts’ forecasts compiled by Bloomberg.
“Driving prices down is an expectation that exports from Malaysia will continue to decline,” said Arhnue Tan, vice president at Alliance Research Sdn. “That may lead to high inventory levels.”
Palm oil has tumbled 32 percent over the past year as supplies from Indonesia and Malaysia, 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 0.7 percent to 6,252 yuan ($1,007) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month lost 1 percent to 7,958 yuan a ton.
