KUALA LUMPUR: Short-sellers on Thursday again drove Malaysian palm oil to its lowest level in a year while other agricultural commodities have fallen slightly or clawed back some losses this week as fears about a global recession ease slightly.
Short-sellers this week were led by a Singapore-based palm oil firm with estates and plantations in Asia.
Traders said the company was spotted quietly buying from the physical markets after forcing the futures market below the 2,800 ringgit level the previous day.
"Losing 150 ringgit over a week is really not such a special thing with the financial turmoil going around. Now everyone is trying to see how far they can push palm oil down," said a trader with a foreign commodities brokerage.
"It's not really that bad compared to the 2008 financial crisis. There are very few defaults as the major buying countries are well hedged this time around," he added.
The benchmark December palm oil futures on the Bursa Malaysia Derivatives Exchange fell 1.1 percent to 2,754 ringgit ($864), the lowest since Oct. 8 last year. By midday, the contract traded at 2,769 ringgit.
Overall traded volumes stood at 15,876 lots of 25 tonnes each from the usual 12,500 lots.
Palm oil prices, which have lost more than a quarter so far this year, have also been weakened by expectations of high stocks and concerns that demand will lose steam after India ends its festival season this month.
Traders are expecting exports for the first ten days of October to show a strong rise on last-minute buying from India and China. Cargo surveyors Intertek Testing Services and Societe Generale are due to issue export data on Monday.
Other financial markets rose on Thursday, as optimism grew over Europe's efforts to support its financial sector and risk aversion eased after an intensive sell-off earlier this week.
Brent crude rose above $102, limiting losses in other vegetable oils that are used as a feedstock for biofuel.
US soyoil for October delivery fell 0.3 percent in Asian trade, partly because the harvest was proceeding faster than expected.
Comments
Comments are closed for this article.