KUALA LUMPUR: Palm oil tumbled below RM2,000 a tonne for the first time in more than five years as forecasts for a record United States harvest of soyabeans used to produce an alternative oil threaten to curb demand.
Futures dropped as much as 2.5 per cent to RM1,989 on the Bursa Malaysia Derivatives, the lowest level since March 2009, and closed at RM2,000, here. Prices are down 25 per cent this year, heading for
the third annual decline in four years.
Palm oil entered a bear market last month as favourable weather boosted the outlook for US soyabean crops, estimated to be the largest ever. Futures also slumped as demand for biofuels missed expectations and forecasts for an El Nino weather, which can disrupt supplies, were scaled back.
The Department of Agriculture may raise its soyabean output estimate next month, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental Singapore.
Bloomberg