Malaysian palm oil futures fell for a third session on Monday, dropping to their lowest in nearly five weeks as poor demand from major buyers sparked concern that palm\u2019s use in food and fuel industries may continue to slump in coming months.<\/p>\n
Palm prices ran up 14 percent from December to a six-month high of 2,394 ringgit by Jan. 15 after monsoon flooding wreaked havoc in parts of Malaysia, the second-biggest grower, inundating estates and destroying infrastructure.<\/p>\n
But market players say worries about the devastation have cooled, and even if growers expect another big drop in output this month, waning export demand from India, China and Europe plus the rout in crude oil could offset that.<\/p>\n
\u201cProduction is down temporarily, but soon it will rise again, and people are worried about how demand will be, with the poor economic growth,\u201d said a trader with a foreign commodities firm in Kuala Lumpur.<\/p>\n
\u201cWe don\u2019t know whether China will buy equal or less amounts of edible oil from last year. Biofuel demand is bad, biodiesel operators can\u2019t do anything,\u201d the trader added. \u201cThese are the two main concerns keeping prices under pressure.\u201d<\/p>\n
The benchmark April contract had dropped 2.5 percent to 2,175 ringgit ($601) per tonne by Monday\u2019s close, after touching 2,170 ringgit in late trade, the lowest since Dec 23. Malaysian exports of palm oil products fell 17.7 percent to 886,189 tonnes between Jan. 1-25 from the same period a month before, according to cargo surveyor Intertek Testing Services.<\/p>\n
Another cargo surveyor, Societe Generale de Surveillance, reported that exports for the same period slid 19 percent.<\/p>\n
The Malaysian Palm Oil Association, a growers\u2019 group, estimates crude palm oil production fell 24.3 percent between Jan 1 and 20. Output from Sarawak alone, Malaysia\u2019s second-largest palm-growing state, was forecast to have dropped more than 28 percent in the same period.<\/p>\n
Oil prices declined on Monday, with US crude falling close to a nearly six-year low, as Saudi Arabia\u2019s new King Salman moved to assuage fears of an unstable transition and any policy change in the world\u2019s largest oil exporter.<\/p>\n
In other vegetable oil markets, the US soyoil contract for March fell 1.1 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodity Exchange lost 1.0 percent.<\/p>\n","protected":false},"excerpt":{"rendered":"
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