KL palm oil futures continue their fall

KL palm oil futures continue their fall

KUALA LUMPUR (Reuters): Malaysian palm oil futures extended their fall on Thursday on liquidation with lingering concerns about rising local supplies exerting pressure on the market.

The benchmark third-month December futures contract closed 10 ringgit down at 896 ringgit (US$235.79) a ton, dipping below the 900 ringgit level for the first time since December 1993.

News that Malaysia has sold 250,000 tons of crude palm oil (CPO) under a tax-free concession had no impact on the bearish market.

Primary Industries Minister Lim Keng Yaik said on Thursday Malaysia had sold half the 500,000 tons of CPO it had allocated for duty free sale in the last four months.

But traders were puzzled because the go-ahead for the concession was only given at the beginning of September. Some believed the concession could have started sometime in June.

"We also doubt the figure as we don't see Malaysia selling that much CPO, even over four months," said one trader.

Traders said recent export figures failed to excite the Malaysian market due to the prospects of rising production in the world's biggest palm oil producer.

The market was waiting for the export figures for the whole of September, but many traders believed prices would stay depressed unless the data showed a big jump in amount compared with August.

Physical Oct (south) crude palm oil was offered at 860 ringgit a ton against bids of 855, and trade was reported at 870 to 857.50.

Among refined products, Oct RBD palm oil was offered at $245 a ton FOB, Nov at $250 and Dec at $252.50.

There were offers for Oct RBD palm olein at $265, Nov at $270 and Dec at $272.50.

Oct RBD palm stearin was offered at $182.50 and Oct palm fatty acid distillate was offered at $145.