KUALA LUMPUR, Aug 17: Malaysian crude palm oil futures closed sharply lower for the fourth straight day on Thursday due to technical selling and a decline in the prices of crude oil.

“Fundamentals are all very good, but the market is now moving on technical grounds,” said one dealer. “Crude oil prices have also come down.” The palm oil market often tracks energy prices with several companies setting up palm-based biofuel plants and as Malaysia moves closer to the October launch of biodiesel at domestic pumps.

The benchmark third-month November crude palm oil contract on the Bursa Malaysia Derivatives market had fallen 2.5 percent or 41 ringgit to 1,586 ringgit ($432) a ton.

Other traded months fell between 36 and 45 ringgit. Volumes stood at 18,227 lots of 25 tons each. “One support level after the other is breaking down, it was 1,675 ringgit, then 1,645, 1,635, 1,620 and now 1,600,” another dealer said.

The open interest was high at 66,168 lots, compared with 35,000 to 40,000 lots a few months ago, which traders said indicated a large number of players.

In the physical market, crude palm oil for August shipment saw sellers at 1,570 ringgit a ton and bids at 1,560. Trades were done between 1,570 and 1,590 ringgit a ton.—Reuters