KUALA LUMPUR, March 20: Malaysian palm oil market fell across the board on Thursday and at one stage hit its lowest level in five months due to fears of disruption in shipments after the United States began bombing Iraq.

At the close, the benchmark third-month futures June contract was 32 ringgit lower at 1,446 ringgit ($380.53) a tonne. The contract had fallen to 1,436 ringgit, its lowest level since October 21, 2002, due to heavy liquidation.

Overall volume was heavy at 6,635 lots.

Palm oil traders said the war could disrupt shipments to consumers in the Middle East and Europe.

We don’t know if the Suez canal will be closed. But if bunker prices go above $220 a ton, then the rates should go up, said the broker, referring to shipping fuel which currently stood at $209/$210.

Freight rates to Red Sea ports were quoted at $27-$30 a ton. Malaysia ships around two million tons of palm oil to the Middle East annually.

Physical crude palm oil market, sellers offered March/ April at 1,480 ringgit a ton against bids of 1,475 ringgit.—Reuters