Palm oil declines for third straight day

Kuala Lumpur: Palm oil dropped for a third day, the worst losing run in almost four weeks, on speculation that commodity demand will falter as European leaders struggle to contain the region's debt crisis.

The January-delivery contract declined as much as 0.8 per cent to 2,914 ringgit per metric tonne on the Malaysia Derivatives Exchange and traded at 2,931 ringgit at 5.20pm in Kuala Lumpur. Earlier, the price rose as much as 0.7 per cent.

Greek Prime Minister George Papandreou called a referendum and a parliamentary confidence vote, raising the prospect the bailout effort may be derailed. Palm oil had climbed above 3,000 ringgit on October 27 for the first time in more than a month as European leaders agreed on a plan to curb the crisis.

"Last week, we saw that the agreement to solve the debt issue came out and that turned the market to slightly bullish," Chandran Sinnasamy, trading head at LT International Futures, said. "After that, people didn't really buy the story because" there were questions on how this plan was going to be implemented, Chandran said.

Bankruptcy protection

A bankruptcy filing from MF Global Holdings also hurt commodities across the board, said Rajesh Modi, a trader at Singapore-based Sprint Exim. MF Global Holdings sought bankruptcy protection on Sunday, three years after the failure of Lehman Brothers Holdings helped to trigger the worst global recession since the Second World War.