Palm oil drops sharply in Europe

Palm oil drops sharply in Europe

LONDON (Reuter): Palm oil prices in Europe opened sharply lower yesterday as sentiment in Europe and the Far East turned against the material.

Crude palm oil cif European opened US$7.50 to $12.50 lower following losses of $12.50 to $15 a ton at Thursday's close.

"We have been expecting this fall, but it was delayed by higher Chicago futures on weather concerns. However, Chicago was down on Thursday night and sentiment as turned against palm oil," said a trader.

Before the end-year break traders forecast lower palm oil prices as Malaysian stocks built up due to slow export business.

"(palm oil) is looking weak into the New Year and I can see Malaysian prices dropping to around M$1,250 in January," a Singapore based trader said in an interview last month.

A near limit close in Malaysian futures yesterday Friday saw March heading for MS$1,250 after dipping below M$1,300.

In Indonesia talk that the state plantations would reduce their January palm oil price to around Rp 1,120-1,130/kg from Rp 1,155 in December added fuel to the market's bearish mood.

Crude palm oil opened in Europe at US$560 a ton for Jan/Mar, $7.50 and $555 for Apr/Jun, $12.50 lower with no business reported so far.

"Buyers are waiting for sellers to come down to them," said a trader.

Among other tropical oils coconut oil was US$10 a ton down after Feb/Mar traded at US$690 and US$695 a ton cif. Palmkernel oil was not quoted so far.

Easier Chicago futures on Thursday triggered lower prices in Europe among soft oils with soy oil one to 1.50 guilders down and rape oil 1.25 guilders lower.