NewsFlashAsia CPO falls $60/t on soy, speculation

21 July 2008 06:50  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude palm oil (CPO) futures traded on the Bursa Malaysia fell by almost 6% or M$194/tonne ($59.7/tonne) on Monday, dipping below the ringgit (M$) 3,200/tonne mark in line with a fall in soybean oil values, the exchange reported on its website.

The benchmark October delivery contract was traded at M$3,218/tonne, after dipping as low as M$3,197/tonne during the morning trade – a $194/tonne plunge after opening at M$3,391/tonne.

While some vegetable oil traders attributed the drop to falling substitute soybean oil prices in the US on Friday after a potential soy farmers’ strike in Argentina was defused, other market sources cited a spate of panic selling from financial institutions invested in the commodity.

"The funds are running away from the market," one palm oil buyer said, adding that current high CPO stockpiles in Malaysia were also weighing on prices.

($1 = M$3.25)

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By: Jeremiah Chan
+65 6780 4359

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