Crude palm oil futures on Bursa Malaysia Derivatives closed lower yesterday on worries that China may reduce purchase of the commodity after implementing credit tightening measures, dealers said.

They said other commodity markets were also lower after China’s central bank told Chinese banks they needed to raise their reserve ratios.

“Weaker external market dampened buying sentiment in the local front,” a dealer said.

At the close, the February 2010 contract fell RM41 to settle at RM2,420 per tonne, March 2010 declined RM56 to RM2,410 per tonne, April 2010 dropped RM62 to RM2,407 per tonne and May 2010 eased RM79 to RM2,411 per tonne.

Turnover increased to 23,835 lots from 10,865 lots on Monday while open interest declined to 74,124 contracts from 75,690 contracts previously.

On the physical market, February South stood at RM2,440 per tonne.

Source: Business Times