KUALA LUMPUR: Malaysian palm oil futures declined 2% at the close of trade on Thursday, weighed down by mounting concerns of a U.S. recession and technical selling after seven consecutive days of gains.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was last down 2% at 2, 175 ringgit ($518.85) per tonne, though still holding near a four-month high.
Palm oil prices have gained 5% since the start of the month, and rose to a four-and-a-half-month high of 2, 223 ringgit in its previous trading session. “The market is down over the recession concerns, ” said a Kuala Lumpur-based trader.
Another trader said palm had weakened due to technical selling after the past week’s continuous gains.
Palm was also earlier weighed down by weaker crude oil, which slipped further below $60 a barrel, pressured by recession concerns and a surprise boost in U.S. crude inventories.
Palm oil prices are impacted by movements in crude oil as the vegetable oil is used as feedstock to make biodiesel, a fuel substitute.
In other related edible oils, U.S. soyoil futures on the CBOT was down 0.6% on Thursday, while the September soyoil contract on the Dalian exchange rose 0.3%.
The Dalian September palm oil contract fell 0.6%. Palm oil prices are also affected by movements in related oils that compete in the global vegetable oils market. – Reuters
Source : The Star