January 29, 2008	Tuesday	Muharram 19, 1429

KUALA LUMPUR, Jan 28: Malaysian crude palm oil futures fell 3.2 per cent on Monday as investors rushed to sell after global commodity and equity markets declined on fears of US economic recession, traders said.

Stock markets in Europe and Asia fell sharply with Japan’s Nikkei dropping nearly 4 per cent, while crude oil slid further below $90 a barrel.

Palm oil prices are now nearly 8 per cent off an historic high of 3,420 ringgit reached two weeks ago, pulled down by volatile world markets and a slowdown in exports.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange settled down 105 ringgit to 3,150 ringgit ($972) per ton.

This is a repeat performance from last week’s carnage.

Funds are flowing out crude and soybean oils and palm is no different, said an analyst with a foreign brokerage.

Other traded months fell between 45 and 102 ringgit.

Overall trade nearly doubled to 19,109 lots of 25 tons each from 10,000 lots that change hands on a routine trading day.

Unless crude goes above $90, we will not see any big changes in palm oil’s direction, said a trader with a local brokerage.

Till then, the decline in exports will continue to depress the market but the situation might change in late February onwards when Asian buyers start to stockpile.

Demand for Malaysian palm oil has waned with cargo surveyor Intertek Testing Services reporting a decline of 29.8 per cent to 784,439 tons for Jan. 1-25 while Societe General de Surveillance said exports fell 27.1 per cent to 816,471 tons.

In Malaysia’s physical market, crude palm oil for January and February shipments in the southern region was quoted at 3,190/3,210 ringgit a ton. Trades were done between 3,230 and 3,240 ringgit.—Reuters