January 28, 2020 / 3:59 AM / a month ago

VEGOILS-Palm oil slumps 7% as spread of coronavirus raises demand worries

    JAKARTA, Jan 28 (Reuters) - Malaysian palm oil futures
plunged 7% on Tuesday, their biggest intraday drop in more than
seven years, on concerns that the spread of a coronavirus in
China would cut demand of the vegetable oil in its
second-largest importer. 
    The benchmark palm oil contract          for April delivery
on the Bursa Malaysia Derivatives Exchange hit its lowest level
since Nov. 28, 2019 at 2,660 ringgit ($654.37) per tonne. 
    The coronavirus outbreak that began in the central Chinese
city of Wuhan, in the province of Hubei, has killed 106 people
in China so far and infected more than 4,520 globally, most of
them in China.             
    "It is because of the virus (that) all commodities are
down," a Kuala Lumpur-based trader told Reuters. 
    Further weighing on prices was soyoil's overnight movement
on the Chicago Board of Trade, which hit a 6-week low. It last
traded 1.2% lower.             
    Palm oil is generally affected by price movements in related
oils as its competes for a share in the global vegetable oil
market.
        
    FUNDAMENTALS
    * Chicago soybean futures slid for a sixth consecutive
session on Tuesday, with the market trading near its weakest
since mid-December, on concerns of lower demand due to the virus
outbreak in China.       
    * Oil futures slipped on Tuesday, extending losses into a
sixth session as the spread of a new virus in China and other
countries raised concerns about a hit to economic growth and
slower oil demand.      
    
    MARKET NEWS
    * Asian stocks extended a global selloff as China took more
drastic steps to combat a deadly new coronavirus, while bonds
shone on expectations central banks would need to keep stimulus
flowing to offset the likely economic drag.              
    * U.S. stocks suffered their worst day in over three months
on Monday as China extended the Lunar New Year holiday due to a
virus outbreak, fuelling worries about the economic impact of
containment efforts in the world's second largest economy.   
    * The yuan was mired near its weakest level in a month in
offshore trade as heightened anxiety about the economic impact
of a deadly new coronavirus in China battered riskier
assets.      
    
DATA/EVENTS (GMT)
1330   U.S.   Durable Goods         Dec
1500   U.S.   Consumer Confidence   Jan
U.S. Federal Reserve's Federal Open Market Committee 
starts its two-day meeting on interest rates


($1 = 4.0650 ringgit)

 (Reporting by Fathin Ungku; editing by Uttaresh.V)
 
 
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