Malaysian palm oil slides 5.6pc

 

MALAYSIAN crude palm oil futures tumbled 5.6 per cent today following a sharp sell-off in US crude oil, traders said.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange fell as much as RM82 to RM1,386 (US$382.8) per tonne by 10:33 am.

“It’s a knee-jerk reaction to the drops in crude oil. If prices continue to fall further, biodiesel is not going to make it unless there are subsidies,” said a trader with local commodities brokerage in the Malaysian capital.

Oil tumbled to a 3-1/2-year low below US$49 a barrel today, nearing a US$100 drop from its July record high, as more distress for the global economy threatened to eat further into demand for fuels.

The December soybean oil contract at the Chicago Board of Trade dropped 2.1 per cent in late Asian trading while Dalian Commodity Exchange’s most-active May 2009 soyoil contract slid 4.8 per cent.

Global vegetable oil prices usually track crude oil moves as rapeseed and soybean oil are increasingly used to make biodiesel which directly competes with petroleum diesel. - Reuters