Bleak Outlook For Palm Oil

August 2008 | Market Strategy

Already under pressure from a build up of stocks and a weakening outlook for commodities, front-month crude palm oil futures fell to a one-year low of MYR2,445/tonne in Kuala Lumpur on August 19, as fears of defaults from China and India continue to weigh on the edible oil. Buyers from China and India - the world's biggest vegetable oil importers - have reportedly cancelled or renegotiated around 800,000 tonnes of palm oil deals within the past few weeks as prices have collapsed, and jitters over further refusals to accept pre-arranged shipments are likely to continue to depress the value of futures contracts over the near term.

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