KUALA LUMPUR (July 24 2003) : Malaysian palm oil futures sustained a bigsell-off on Wednesday, falling to their lowest level in 14 months on longliquidation, fears of rising output and a weakening soyaoil market,traders said.
"Charts never tell lies. The downside is not over yet," said one analyst.Benchmark third-month October last traded at 1,288 ringgit ($338.95) atonne, down 43 ringgit, after trading as low as 1,280 ringgit. Overallvolume jumped to 10,482 lots compared with 6,365 lots on Tuesday.
Dealers said edible oil importers in India, the world's largest consumer,had shown fresh interest in palm oil because of falling prices.
But that offered little support for the market due to worries over risingoutput in Malaysia.
Also, players had factored in prospects of Malaysian palm oil exportsreaching one million tonnes each month from July onwards because offestival seasons in main consumers such as India, China and Pakistan.
"From July through October, India will be importing between 1.5 and 1.8million tonnes of edible oils, including palm oil and soyaoil becausethere's no local oil yet," said one dealer, indicating steady demand.
Malaysia was likely to produce 13 million tonnes of crude palm oil (CPO)in 2003, higher than the government's recent estimates of 12 million, saidtraders.
The world's largest grower produced 11.9 million tonnes of CPO last year.
In physical trade, the July contract saw offers closing at 1,450 ringgit atonne for southern region against bids at 1,445.
Deals were reported at 1,450 ringgit.
July CPO for central was offered at 1,450 ringgit against bids of 1,445.Deals were reported at 1,445 to 1,450 ringgit.
August CPO was offered/bid at 1,445/1,440 in the southern region.
Business was done at 1,445 to 1,450 ringgit. August CPO for central wasoffered at 1,440 ringgit against bids of 1,430 ringgit. No deals weredone.