KUALA LUMPUR: Malaysian palm oil futures plunged 3.6% on Thursday to a near four-week low, as weaker rival oils, rising output and political uncertainty in Malaysia knocked market sentiment.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed 103 ringgit, or 3.6%, lower at 2,758 ringgit ($662.03) a tonne, its lowest since Aug. 28.
Palm declined for the fourth consecutive session, its longest losing streak since June. The commodity has dropped about 10% so far this week, its biggest weekly fall since late February if losses hold.
Malaysia's opposition leader Anwar Ibrahim said on Wednesday he has secured a "formidable" majority from lawmakers to oust the Prime Minister, heralding a fresh bout of political drama in the world's no. 2 palm producer.
Heavy declines in soyabean oil on the Dalian Exchange and Chicago Board of Trade also dragged palm prices, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
"Physical palm prices are under heavy downward pressure and this may entice new buying opportunity," he added.
Dalian's most-active soyaoil contract fell 3.37%, while its palm oil contract slipped 3.95%. Soyaoil prices on the Chicago Board of Trade were down 1.86%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Further pressuring palm, plantations in Indonesia and Malaysia entered the seasonal peak production period, with one industry group predicting Malaysia's output during Sept. 1-20 would rise 5% from the previous month, according to traders.
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