February 20, 2009 3:00 GMT+8
Malaysian crude palm oil futures closed lower for the fourth day in a row yesterday, on fears it may track the decline in soyabean prices, traders said.
“Soyabean is still below US$9 (US$1 = 3.61), where as it was at US$10-US$11 when palm oil was at RM2,000, so it hasn’t caught up,” an analyst at a Singapore-based brokerage firm said.
The benchmark May contract fell RM15, or 0.8 per cent, to RM1,860 per tonne, having fallen as low as RM1,830 ringgit, a level not seen since February 6.
The price of the tropical oil has steadily climbed from the October 28 low of RM1,331 but has struggled to hold above RM2,000 on demand concerns.
Other traded contracts were mixed. The overall volume was 22,439 lots of 25 tonnes each.
The Singapore-brokerage analyst said that what could drive palm further down is the prospect that soyabean crops might not be as bad as people had feared.
“People are ignoring that supply from the US is going to be huge,” the analyst said, adding that the market has focused too much on the drought in Argentina.
Oil prices rose above US$35 a barrel yesterday ahead of the US data expected to show crude inventories in the top energy consumer hit an 11-year high amid a worsening recession. - Reuters
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