Malaysian crude palm oil futures fell 1.6 per cent yesterday as investors took profits on weaker crude oil and dismal export numbers from cargo surveyors.
Prices of the tropical oil have fallen around 25 per cent this year, dragged down by bumper harvests, defaults by Asian consumers and rival Indonesia cutting its export taxes amid roiling financial markets.
The most-active December contract on the Bursa Malaysia Derivatives Exchange settled down RM38 to RM2,280(US$665) after hitting an intraday low of RM2,259.
“The physical market is more brisk with some short-covering ahead of the long holidays next week but in the futures market, traders want to square positions because the outlook is uncertain,” said a trader with a local commodities broker.
The predominately Muslim country will celebrate Eid al-Fitr on Tuesday or Wednesday to mark the end of the fasting month of Ramadan. All financial markets will be closed on that day.
Other traded months fell between US$5 and US$60. Overall trade stood at 19,370 lots of 25 tonnes each, nearly doubling from the 10,000 lots that change hands on a routine trading day.
Export trends for Malaysian palm oil are not promising. Cargo surveyor Intertek Testing Services reported a 14 per cent decline to 981,637 tonnes for September 1-25. Societe General de Surveillance estimated shipments fell by 12.9 per cent to 990,686 tonnes.
Oil fell yesterday on lingering uncertainty about the proposed US US$700 billion bank bailout plan and signs of slumping demand in top consumer nations. U.S soyoil for October delivery edged 0.4 per cent lower but the most-active January 2009 soybean oil contract on the Dalian Commodity Exchange inched up nearly 1 per cent.
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