Crude palm oil hits lower circuit, plunges 4%

Weak overseas trend, subdued demand influence prices

Crude palm oil prices tumbled 4% to hit lower circuit at Rs 407.20 per 10 kg in futures trade today after participants offloaded their positions amid a weak trend overseas.

Subdued demand at the spot markets put pressure on the prices.

The crude palm oil for delivery in October fell sharply by Rs 17, or 4.01%, to hit lower circuit at Rs 407.20 per 10 kg at the Multi Commodity Exchange, with a business turnover of 93 lots.

The November contract fell by a similar margin to hit a lower circuit at Rs 409.10 per 10 kg, with a business volume of 291 lots.

Trading sentiment remained bearish largely in line with a weak trend overseas.

Palm oil futures in Malaysia traded lower as global economic slowdown hurt demand for the oil amid an increase in production in Indonesia and Malaysia, the world's largest producers, marketmen said.

Meanwhile, the December-delivery contract lost 8.5% to 2,255 ringgit ($739) a tonne, the lowest close for the most-active month on the Malaysia Derivatives Exchange since November 2009. Futures have plunged 25% in five weeks.