SINGAPORE: Malaysian palm oil futures slumped about 3.6 per cent on Tuesday, their biggest intraday drop in nearly seven months, as weaker rival oils on China’s Dalian Commodity Exchange and expectations of lower imports by key buyer India weighed on sentiment.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange dropped as much as 3.6 per cent to 2,634 ringgit, its lowest since November 19, before recovering slightly to end down 2.2pc at 2,674 ringgit ($641.25).
Two traders attributed the sharp fall to cheaper Dalian alternatives. Dalian’s January palm oil contract fell nearly 4pc on Tuesday, while the soyoil contract slid 2.2pc. Soybean oil on the Chicago Board of Trade declined 0.3pc.
Dalian palm futures fell on higher imports of the vegetable oil by China in October and expectations of more shipments in November and December, said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.
Published in Dawn, November 27th, 2019