Palm oil loses ground as Europe concerns weigh

SINGAPORE: Malaysian palm oil futures fell on Thursday after resuming trading after a one-day break, as traders booked profits and buying interest was limited by concerns over the European debt crisis and a possible slowdown in the global economy.

Along with recent data from the United States and China suggesting a slowdown in economic recovery, new worries about Spain's fiscal woes weighed on investor sentiment, dragging palm oil futures below the 3,600-ringgit mark.

"The market's down today on some profit-taking after the holiday. Fundamentally, supply and demand factors still remain largely the same. It's just that the market has been run up so this is purely a correction on uncertainty over external factors," a trader with a foreign commodities brokerage in Malaysia said.

Benchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange lost 1.5 percent to close at 3,559 ringgit ($1,161) per tonne.

Traded volumes stood at 26,342 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.

Palm oil futures went as high as 3,628 ringgit on Tuesday, a level not seen since March 8 last year, on bullish data suggesting lower stocks and higher exports.

Malaysia's palm oil stocks for March fell to a seven-month low at 1.96 million tonnes as export growth outpaced production, said industry regulator Malaysian Palm Oil Board.

This exceeded estimates in a Reuters poll that called for a 3.5 percent drop in palm stocks to 1.99 million tonnes.

Exports recorded a monthly gain of 7.8 percent and 8.9 percent for the first 10 days of April, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance respectively.

Brent crude held steady above $120 on Thursday as a weaker dollar helped recoup losses made earlier in the day, while comments from the US Federal Reserve and the European Central Bank eased worries about growth in oil demand.

In other vegetable oil markets, the most active US soyoil contract for May gained 0.1 percent while the most active Dalian soyoil September contract inched up 0.2 percent.