Well, thanks to the article below, the selling in CPO stocks will reach a climax. Defaults will happen when prices of any commodity falls too fast - who want to pay last week's prices that were 20% higher? Of course, there is the rule of law and contracts, but the news will spark fears and panic. As I see it, this is an EXCELLENT time to buy CPO companies especially when prices dip below RM2,400 this afternoon session. Defaults are not earth shattering, they just want better prices, they still have to buy.
Article from Reuters :
China defaults on 40,000 t palm oil -exporters Fri Aug 15, 2008 10:45am IST
SINGAPORE, Aug 15 (Reuters) - Chinese buyers have defaulted on at least 40,000 tonnes of RBD palm olein after a drop of more than 8 percent in prices on Friday, Malaysian exporters said.
"There is a default of 30,000 to 40,000 tonnes since morning today, but obviously defaults will be much more than that as prices have come down from 2,600 ringgit, to the 2,400 ringgit level," said one dealer at a leading export house.
Another Kuala Lumpur trader added more than 100,000 tonnes of contracts would be washed out as importers would be reluctant to take delivery after the price fall.
p/s photos: Pace Wu Pei Ci
No comments:
Post a Comment