Jakarta: Palm oil futures in Malaysia, the global benchmark, fell for the fourth day on concern demand for its use in fuel applications would be curbed by higher prices.
Palm oil for October delivery on the Malaysia Derivatives Exchange dropped 0.5% to 2,465 ringgit ($712) a tonne at the end of the morning trading session. The price has averaged 51 per cent higher since January 1 compared to a year-earlier period.
Indonesia and Malaysia produce almost 90% of the world’s output of palm oil, which has risen on demand from China and India, the world’s biggest vegetable oil importers. Palm oil is used mainly as a cooking fat and for cleaning agents.
Demand from fuel producers has boosted prices. Vegetable oils are being increasingly used in bio-ethanol and bio-diesel as the price of crude oil has almost tripled in five years.