Malaysian crude palm oil futures fell 7.3 percent to a one-week low on Tuesday as fears of defaults by Chinese buyers amid rising supply encouraged players to sell contracts heavily, traders said. A broad decline in commodities, including crude oil and soyoil, added to the pressure on palm oil, they said.
The benchmark November palm oil contract fell 191 ringgit, or 7.3 percent, to finish at 2,409 ringgit ($710) per tonne, the lowest since August 19. "I think the market will be under tremendous pressure after news that Chinese buyers could default on deals," one trader aid.
Chinese buyers have secured 150,000 tonnes of refined, bleached and deodorised palm olein in the past few days, but Chinese traders warned that further price falls could still lead to more defaults on purchases. Malaysian palm futures have fallen nearly 45 percent since a record high in March, which has led to defaults on purchases in China and India, the top two buyers of the vegetable oil.
US crude oil fell by more than $1 a barrel to below $114 on Tuesday as the US dollar strengthened, countering concern that Hurricane Gustav could threaten oil installations in the Gulf of Mexico. At 1026 GMT it was at $113.20 a barrel. September soybean oil futures fell 3.32 percent to 52.71 US cents per lb.
Indonesian crude palm oil prices dropped in line with the Malaysian market, traders said. Crude palm oil prices at the state marketing centre's auction in Jakarta fell 4.7 percent to 6,668 rupiah a kg from 6,995 rupiah a kg on Monday.
Producers in Medan, North Sumatra - home to Belawan port, the country's key port for palm oil exports - sold crude palm oil at 6,540-6,650 rupiah a kg, down from 7,080-7,090 rupiah a kg on Friday. There was no auction on Monday. In Jakarta, refiners offered refined, bleached, deodorised (RBD) palm olein - used as cooking oil - at 7,450 rupiah a kg, down from 7,600 rupiah a kg on Monday.
Comments
Comments are closed.