Asia CPO falls to two-year low on plunging crude

16 October 2008 06:21  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude palm oil (CPO) futures traded on Bursa Malaysia plunged to their lowest levels in over two years in tandem with a slide in crude oil prices, traders said on Thursday.

 

The benchmark contract for January delivery fell by as much as ringgit (M$) 128/tonne ($36.36/tonne) to M$1,620/tonne in the morning as a crash in crude oil prices continued to weigh on most agricultural commodity values. The contract had closed at M$1,748/tonne last evening.

 

Corn prices tumbled below $4/bushel and December delivery soybean oil, which traditionally trades at a premium to palm oil, was hovering at 35.53cts/lb on the Chicago Board of Trade, falling 2.47cts/lb or 6.5% from the previous settlement.

 

“You’ll need to build a dam to stop the blood from flowing,” one vegetable oil broker said, pointing out that anybody who had taken long positions earlier and had failed to liquidate their holdings were “bleeding” from losses sustained from the slump in CPO prices.

 

CPO has a variety of end uses, including feedstock for palm based biodiesel, oleochemicals, glycerine as well as cooking oil. Major CPO producers in the region include Guthrie, Wilmar, Sime Darby and IOI.

 

 ($1=M$3.52)

 

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By: Jeremiah Chan
+65 6780 4359

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