Palm oil falls 4% on global cues

Reflecting the global trend, especially in Malaysia and Indonesia, crude palm oil (CPO) fell 4 per cent both on the Multi Commodity Exchange (MCX) and the National Commodity & Derivatives Exchange (NCDEX).

On MCX, the highest consumed edible oil for its October delivery fell to Rs 362.10 per 10 kg while September contract slumped 3.99 per cent to Rs 363.40 per 10 kg. The spot price of CPO at MCX closed at Rs 391.30 per 10 kg in Kandla.

Surprisingly, the oil remained at Rs 400.35 per 10 kg at NCDEX because of no trade for its September delivery while the spot price closed at Rs 391.90.

CPO in Malaysia dipped 7.3 per cent to close at 2,409 ringgit, a fall of 191 ringgit on fear that Chinese buyers may default. Heavy selling continued throught the session supported largely by the bearish sentiment in crude oil and soyoil. The futures have fallen 45 per cent since it reached about $4,300 in March.

According to the sources, Chinese buyers bought 150,000 tonnes of palm oil amid fears and warned that a further fall could lead to more defaults.

Meanwhile, Dorab Mistry, director, Godrej International had already estimated the price fall to 2,200 ringgit on Monday in a seminar in Malaysia which would be a support level for recovery in the demand.

At this level, stockist demand may resume and therefore, prices may move upwards.