November 8, 2012 / 10:17 AM / 5 years ago

VEGOILS-Palm oil falls to 1-mth low on U.S., Europe worries

* Prices fall to 2,328 ringgit, lowest since Oct. 4
    * Palm oil tracks losses in global markets
    * Prices must stay near 2,200 ringgit for 2 mths to
stimulate demand -Mistry

 (Updates prices)
    By Chew Yee Kiat
    SINGAPORE, Nov 8 (Reuters) - Malaysian palm oil futures fell
to their lowest in more than a month on Thursday, tracking
losses in global markets caused by renewed worries that economic
woes in the United States and Europe could hurt commodity
demand.
    Crude oil and equities slumped as euphoria faded after
President Barack Obama's re-election on Wednesday, with the
world's biggest economy now facing a so-called fiscal cliff of
$600 billion in automatic tax increases and spending cuts.
 
    Sentiment was also dented by a gloomy outlook for Europe
after the European Commission said the euro zone economy would
barely grow next year.     
    "There is a lot of uncertainty after the U.S. election, you
have all these problems in Europe, and then there's also the
fiscal cliff," said a trader with a foreign commodities
brokerage in Malaysia.
    "Local sentiment for palm is also bearish, because of high
stocks. I don't think palm has any support until you can see
very strong demand followed by a drawdown in stocks, then the
market will stabilise."
    The benchmark January contract on the Bursa
Malaysia Derivatives Exchange closed 2.9 percent down at 2,328
ringgit ($760) per tonne, the lowest since Oct. 4.
    Total traded volumes stood at 37,323 lots of 25 tonnes each,
higher than the usual 25,000 lots.
    Palm oil prices must stay at around 2,200 ringgit a tonne
for two months in order to stimulate demand for the edible oil
and reduce high stock levels, leading industry analyst Dorab
Mistry said at a conference in China on Thursday.
 
    Malaysian palm oil futures have lost almost 25 percent so
far this year, weighed by record high stocks and global economic
uncertainty.
    Stock levels in Malaysia, the world's No.2 palm oil
producer, may reach a new record at 2.67 million tonnes in
October, a Reuters survey showed on Tuesday.    
    Traders will be watching Malaysian exports data for Nov.
1-10 from cargo surveyor Intertek Testing Services, due to be
released on Saturday, and October stocks data from industry
regulator, the Malaysian Palm Oil Board, on Monday.      
    In related markets, Brent crude rose above $107 a barrel in
Asia on Thursday as a slump of almost 4 percent in the previous
session, its biggest fall in about a year, lured in some buyers,
although worries over a possible U.S. fiscal crisis and Europe's
woes kept a lid on gains. 
    In other vegetable oil markets, U.S. soyoil for December
delivery inched up 0.1 percent in early Asian trade. The
most active May 2013 soybean oil contract on the Dalian
Commodity Exchange ended flat.        
  Palm, soy and crude oil prices at 1007 GMT
                                                                                 
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      NOV2    2240   -50.00    2240    2284     151
  MY PALM OIL      DEC2    2297   -33.00    2280    2337    2174
  MY PALM OIL      JAN3    2328   -69.00    2328    2399   17791
  CHINA PALM OLEIN MAY3    6788   -44.00    6780    6868  437004
  CHINA SOYOIL     MAY3    8750    +0.00    8690    8796  652164
  CBOT SOY OIL     DEC2   48.71    +0.09   48.45   48.97    8569
  NYMEX CRUDE      DEC2   84.97    +0.54   84.51   85.39   22723
                                                                                 
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
 ($1=3.06 ringgit)

 (Editing by Clarence Fernandez and Miral Fahmy)

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