KUALA LUMPUR: Malaysian palm oil futures fell on Thursday to its lowest in a month, dragged by weakness in rival edible oils and concerns over the U.S banking crisis.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 32 ringgit, or 0.81%, to 3,935 ringgit ($874.44) a tonne.
Palm fell for a fourth time in five sessions to hit its lowest closing since February 15.
“Futures was reeling from the impact of banking sector crisis rocking the wider financial markets,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Asian stocks slid and investors turned to the safety of gold, bonds and dollars as Credit Suisse became the latest focal point for fears of a banking crisis, leaving markets on edge.
Malaysia’s exports for March 1-15 surged between 55% and 72% from the same period in February as shipments to India jumped ahead of the Muslim festival of Eid, according to cargo surveyors data on Wednesday.
In top producer Indonesia, palm oil producers sold 360,150 tonnes of cheap cooking oil to the domestic market in February, the country’s trade minister said on Wednesday, short of a government target designed to ensure supply to local consumers.
Despite firm fundamentals, the macro outlook has turned sharply negative and uncertainty over the El Nino weather conditions is also on the cards, Varqa said.
Cereal and oilseed crops across Asia are forecast to face hot, dry weather, with meteorologists expecting the El Nino weather pattern to develop in the second half of the year, threatening supplies and heightening concerns over food inflation.
Dalian’s most active soyoil contract fell 2.8%, while its palm oil contract lost 1.1%. Soyoil prices on the Chicago Board of Trade were down 0.4%.