PALM oil declined to the lowest in almost two years as crude oil fell for a second day on concern that a US government plan to invest US$250 billion in banks won't be enough to spur economic growth.
Palm oil, used mainly for cooking, tracks crude as analysts consider it viable as biofuels when oil trades above US$80 a barrel. Crude declined 0.8 per cent to US$78 a barrel in after-hours trading on the New York Mercantile Exchange at 11.42 am Singapore time.
Palm oil for December delivery dropped as much as 6 per cent to RM1,738 (US$495) a metric ton EXW on the Malaysian Derivatives Exchange and traded at RM1,752 at 11.50 am local time. Futures have plunged 61 per cent from a record in March.
"If crude oil slides to US$60 a barrel, crude palm oil would average RM2,220," said Ben Santoso, a plantation analyst at DBSVickers Securities Singapore.
Palm oil exports from Malaysia, the largest producer after Indonesia, fell 9.1 per cent to 560,210 tons in the first 15 days of October compared with the same period in September, Intertek, an independent surveyor, said today. Exports fell 12 per cent in September to 1.29 million tons, the first drop in three months, the Malaysian Palm Oil Board said October 10.
Indonesia and Malaysia, which account for 90 per cent of the world's palm oil production, this week proposed export measures to reduce inventory to support prices. Both countries, which are oil producers, also passed measures to introduce biofuels for domestic use to absorb surpluses.
Palm oil for January delivery in Dalian dropped the daily limit of 5 per cent to 5,034 yuan (US$784) a ton. - Bloomberg
Palm oil, used mainly for cooking, tracks crude as analysts consider it viable as biofuels when oil trades above US$80 a barrel. Crude declined 0.8 per cent to US$78 a barrel in after-hours trading on the New York Mercantile Exchange at 11.42 am Singapore time.
Palm oil for December delivery dropped as much as 6 per cent to RM1,738 (US$495) a metric ton EXW on the Malaysian Derivatives Exchange and traded at RM1,752 at 11.50 am local time. Futures have plunged 61 per cent from a record in March.
"If crude oil slides to US$60 a barrel, crude palm oil would average RM2,220," said Ben Santoso, a plantation analyst at DBSVickers Securities Singapore.
Palm oil exports from Malaysia, the largest producer after Indonesia, fell 9.1 per cent to 560,210 tons in the first 15 days of October compared with the same period in September, Intertek, an independent surveyor, said today. Exports fell 12 per cent in September to 1.29 million tons, the first drop in three months, the Malaysian Palm Oil Board said October 10.
Indonesia and Malaysia, which account for 90 per cent of the world's palm oil production, this week proposed export measures to reduce inventory to support prices. Both countries, which are oil producers, also passed measures to introduce biofuels for domestic use to absorb surpluses.
Palm oil for January delivery in Dalian dropped the daily limit of 5 per cent to 5,034 yuan (US$784) a ton. - Bloomberg
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