Palm oil nears bear market as output goes up

Prices drop: Workers load and arrange palm oil fruits on lorry inside a palm oil factory in Sungai Besar, Selangor. Palm oil futures slumped as much as 5.6 yesterday to RM2,223 a tonne, the most since October 2012.

KUALA LUMPUR: Palm oil, the world's most-traded vegetable oil, is poised to enter a bear market, dragged down by concerns over rising supply and lower prices of alternatives.

The benchmark futures contract on Bursa Malaysia Derivatives in Kuala Lumpur has dropped 19% from this year's closing high of RM2,779 reached on March 29. A close at or below RM2,223, a drop of at least 20% from the March high, will meet the common definition of a bear market.