KUALA LUMPUR, Dec 3: Malaysian crude palm futures fell to a one-month low on Monday as long liquidation pressures tied to weaker crude and soyaoil gripped the market.

But fresh buying late in the session saw prices of edible oil cancel out most of the earlier losses.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange fell as much as 45 ringgit, or 1.5 per cent, to 2,885 ringgit ($861), a level not seen since November 2. The contract settled down 4 ringgit on 2,926 ringgit.

With the declines in crude and soyaoil putting pressure on palm oil, it may become attractive to Chinese buyers who want to buy before the festival season, said a dealer with a commodities trading firm, refering to Chinese New Year which falls on early February.

But that remains to be seen because all these markets are too choppy to make sense of. Other traded months fell between 16 and 36 ringgit.

Overall trade stood at 11,504 lots of 25 tons each.

Palm oil, used in products ranging from instant noodles to lipstick, is still up nearly 47 per cent up this year.

The commodity has been tracking moves in crude oil market as it a feedstock for biodiesel, an increasingly popular “greener” alternative.

Oil bounced back above $89 a barrel on Monday as traders bet last week’s near $10 sell-off was overdone, and might turn the tides against an expected increase in Opec output when the cartel meets later this week.

December soyaoil closed 0.56 cent weaker at 45.65 cents per lb; deferreds down 0.08 to 0.56 cent.

Traders said palm oil market players were divided over whether to track movements in crude prices or to focus on demand and supply fundamentals.

At this point, all the factors are interlinked but with crude oil prices boosting palm oil, demand is definitely going to be affected, said another trader.

The market needs a bigger correction. Exports of Malaysian palm oil products for November fell 2.2 per cent to 1,289,182 tons from 1,318,306 tons shipped in October, cargo surveyor Intertek Testing Services said on Friday.

In Malaysia’s physical market, crude palm oil for December shipment in the southern region was quoted at 2,910/2,920 ringgit a ton.

Trades were done between 2,900 and 2,910 ringgit.—Reuters