Asia CPO hits 17-month low, breaks $583/tonne

30 September 2008 06:18  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude palm oil (CPO) futures fell below the psychological ringgit (M$) 2,000/tonne ($583/tonne) mark for the first time in 17 months, data from Bursa Malaysia showed on Tuesday.

 

The benchmark December delivery contract traded on the Malaysian exchange fell as much as 6.4% to M$1,988/tonne this morning from Monday’s close, before rebounding slightly to M$2,000/tonne at 11:24am local time (04:24 GMT).

 

Such values were last seen in March 2007, according to data compiled by the Malaysian Palm Oil Board.

 

CPO buyers attributed the plunging numbers to falling crude oil values, which reduced the appeal of palm-based biodiesel as an alternative to conventional fossil fuels.

 

The general demand for commodities could also weaken further given the dismal economic climate, market sources said.

 

“We are now facing a recession, I think it [CPO prices] will go to M$1,500-1,800/tonne in the near future,” said a Singapore-based marketing manager of a downstream palm methyl ester (PME) plant in the region.

 

($1 = M$3.43)

 

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By: Jeremiah Chan
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