JAKARTA: Malaysian palm oil futures hit a fresh 15-month low on Wednesday, extending losses for a fifth straight session, as global recession fears hurt demand in edible oils market.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 5.08% to 3,344 ringgit ($724.28) per tonne by midday break.

Earlier in the session, it dropped to 3,326 ringgit, its lowest since June 18, 2021.

The contract has lost 14% so far in five days. As prices broke below 3,430 ringgit level, traders “were aggravated to clear their long positions”, a trader in Kuala Lumpur said.

“Global turmoil in energy and share markets added to selling pressure in edible oils side.”

Asian share markets tumbled, as surging borrowing costs intensified fears of a global recession, spooking investors into the arms of the safe-haven dollar and punishing currencies across the region. Oil prices fell more 1%, pressured by a strengthening dollar and crude storage builds that offset support from US production cuts caused by Hurricane Ian.

Dalian’s most-active soyoil contract fell 0.52%, while its palm oil contract dropped 1.08%.

Palm falls further on weaker rival oils

Soyoil prices on the Chicago Board of Trade declined 1.22%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market, while weaker crude oil makes palm oil less attractive as biofuel feedstock.

Palm oil may retest a support at 3,427 ringgit per tonne, a break below could open the way towards 3,288-3,360 ringgit range, Reuters technical analyst Wang Tao said.

Exports of Malaysian palm oil products for Sept. 1-25 rose between 18.6% and 20.9% from a month-ago figures, cargo surveyors said.