MARKET DEVELOPMENT
Palm Extends Losses To Hit 4-day Low, Tracks Drop in Crude
Palm Extends Losses To Hit 4-day Low, Tracks Drop in Crude
21/01/2016 (Agence France-Presse) - Malaysian palm oil futures stretched their losses into a second straight session on Thursday to hit a four-day low, tracking weak crude and competing vegetable oil prices.
Palm oil prices have come under pressure in the absence of an expected pick up in imports by key consumer China ahead of Lunar New Year celebrations in February. A slowdown in growth in the world's No.2 economy and ample world supplies of rival soyoil have curbed the country's demand for the tropical oil.
The palm oil contract for April on the Bursa Malaysia Derivatives Exchange fell 0.8 percent to 2,435 ringgit ($556.70) per tonne at the midday break - its lowest this week.
Traded volume stood at 10,626 lots of 25 tonnes each.
"Palm oil is down as soyoil on the Chicago Board of Trade closed down yesterday night," said a trader based in Kuala Lumpur. "There's also uncertainty in China's economy and weak crude oil prices."
With China's economic growth cooling to its slowest pace in 25 years, its demand for most commodities has been hit. The country is the world's No.2 consumer of palm oil after India.
Cargo surveyor data on Wednesday showed shipments from Malaysia over Jan. 1-20 dropped 8-10 percent month on month, a sharper fall than traders had anticipated.
In related markets, crude oil prices stabilised after plumbing more than 12-year lows in the previous session. Analysts, however, say that a persistent supply glut will continue pressuring the market. Lower crude prices make palm oil less attractive for blending into biodiesel.
Palm oil prices have come under pressure in the absence of an expected pick up in imports by key consumer China ahead of Lunar New Year celebrations in February. A slowdown in growth in the world's No.2 economy and ample world supplies of rival soyoil have curbed the country's demand for the tropical oil.
The palm oil contract for April on the Bursa Malaysia Derivatives Exchange fell 0.8 percent to 2,435 ringgit ($556.70) per tonne at the midday break - its lowest this week.
Traded volume stood at 10,626 lots of 25 tonnes each.
"Palm oil is down as soyoil on the Chicago Board of Trade closed down yesterday night," said a trader based in Kuala Lumpur. "There's also uncertainty in China's economy and weak crude oil prices."
With China's economic growth cooling to its slowest pace in 25 years, its demand for most commodities has been hit. The country is the world's No.2 consumer of palm oil after India.
Cargo surveyor data on Wednesday showed shipments from Malaysia over Jan. 1-20 dropped 8-10 percent month on month, a sharper fall than traders had anticipated.
In related markets, crude oil prices stabilised after plumbing more than 12-year lows in the previous session. Analysts, however, say that a persistent supply glut will continue pressuring the market. Lower crude prices make palm oil less attractive for blending into biodiesel.