Malaysian palm oil futures closed 1 percent lower on Thursday, after touching its lowest level in more than a week, tracking losses in global stocks and commodities markets. European stocks slumped to a more than 18-month low on Thursday after Wall Street's worst loss in eight months triggered a sell-off in global shares.
Oil prices also fell to two-week lows as global stock markets fell, with investor sentiment taking a further hit after an industry report showed US crude inventories rose more than expected. Palm oil prices are impacted by crude oil's movement, as the edible oil is used as feedstock to make biodiesel. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange ended 1.1 percent lower at 2,170 ringgit ($521.89) a tonne.
It earlier fell to 2,153 ringgit, its weakest level since October 2. Trading volumes stood at 32,903 lots of 25 tonnes each at the end of the trading day. "Palm is tracking the global sell-off in stock markets and weakness in crude oil prices," said a Kuala Lumpur-based futures trader.
In other related oils, the Chicago December soyabean oil contract edged down 0.6 percent while the January soyabean oil contract on the Dalian Commodity Exchange fell 1.7 percent.
The Dalian January palm oil contract declined 1.7 percent. Palm oil prices are affected by movements of other edible oils as they compete for a share in the global vegetable oils market.
Palm oil may fall more into a range of 2,162-2,171 ringgit per tonne, as suggested by a projection analysis, said Reuters market analyst for commodities and energy technicals, Wang Tao.
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