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