Palm oil dropped for a third day, the worst losing run this month, on speculation increased output from Indonesia and Malaysia, the top growers, will boost supply.
The June-delivery contract lost 2 percent to 3,282 ringgit ($1,084) per metric ton, the most since March 22. The commodity fell 0.7 percent yesterday and 1.3 percent on April 12.
Futures have lost 17 percent since reaching a 35-month high of 3,967 ringgit Feb. 10 as a fading La Nina improved the outlook for production. The phenomenon caused excessive rain in parts of Southeast Asia, disrupting harvesting and affected yields. Global palm oil output this year will be at least 3 million tons higher than 2010, Dorab Mistry, director of Godrej International Ltd., said April 12.
“Palm oil supply pressure is there in the market,” Chandran Sinnasamy, head of trading at LT International Futures (M) Sdn, said by phone in Kuala Lumpur. “If there are no weather issues and no further cuts in soybean acreage, I think palm oil prices will follow supply pressure.”
La Nina will start to weaken in the equatorial Pacific in April, normalizing weather in Malaysia and bringing levels of rain that should favor oil palms, the country’s Meteorological Department said in an e-mailed report yesterday.
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