Palm oil drops on global economic woes

Tuesday, 5 June 2012 01:01 - - {{hitsCtrl.values.hits}}

Singapore (Reuters): Malaysian palm oil futures dropped to their lowest so far this year on Monday, as investors scrambled for the exit on growing global economic fears that also dragged down broader commodities markets.

Palm oil fell below the key 3,000-ringgit mark for the first time since Dec 2011, with investors bearish due to weak economic data and as the eurozone debt crisis rumbles on.

“Sentiment is bad across all risky assets, for example crude oil. On the demand side, however, palm oil is still positive,” said Alan Lim, research analyst with Kenanga Investment Bank in Malaysia.

“Palm oil is more on the defensive side because it’s used mainly for food, so demand should be sustainable. Investors will be looking closely at the Greece election on June 17, so the market will still be volatile for this week and the next.”