Palm hits 1-week low track­ing global sell-off in stocks

The Financial Daily - - NATIONAL -

KUALA LUMPUR: Malaysian palm oil fu­tures fell over 1 per­cent at the mid­day break on Thurs­day, touch­ing its low­est lev­els in over a week, track­ing losses in global stocks and com­modi­ties mar­kets.

Asian share mar­kets sank on Thurs­day af­ter Wall Street suf­fered its worst drub­bing in eight months, a con­fla­gra­tion of wealth that could threaten busi­ness con­fi­dence and in­vest­ment across the globe.

Oil prices also fell to two-week lows, ex­tend­ing big losses from the pre­vi­ous ses­sion amid a rout in global stock mar­kets and from an in­dus­try re­port show­ing US crude in­ven­to­ries rose more than ex­pected.

Palm oil prices are im­pacted by crude oil move­ments, as the edi­ble oil is used as feed­stock to make biodiesel.

The bench­mark palm oil con­tract for De­cem­ber de­liv­ery on the Bursa Malaysia De­riv­a­tives Ex­change dropped 1.4 per­cent at 2,162 ring­git a tonne at the mid­day break.

It ear­lier fell to 2,153 ring­git, its weak­est lev­els since Oc­to­ber 2.

Trad­ing vol­umes stood at 13,756 lots of 25 tonnes each at noon.

"Palm is track­ing the global sell down in mar­kets and crude oil prices," said a Kuala Lumpur based fu­tures trader.

In other re­lated oils, the Chicago De­cem­ber soy­bean oil con­tract edged down 0.8 per­cent, while the Jan­uary soy­bean oil con­tract on the Dalian Com­mod­ity Ex­change fell 1.4 per­cent.

The Dalian Jan­uary palm oil con­tract de­clined 1.6 per­cent.

Palm oil prices are af­fected by move­ments of other edi­ble oils, as they com­pete for a share in the global veg­etable oils mar­ket.

Palm oil may fall more into a range of 2,1622,171 ring­git per tonne, as sug­gested by a pro­jec­tion anal­y­sis, said Reuters mar­ket an­a­lyst for com­modi­ties and en­ergy tech­ni­cals, Wang Tao.

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