KUALA LUMPUR, Oct 3: Malaysian palm oil futures tumbled to one-year lows on Monday on concerns that the euro zone’s deepening debt crisis will stall global economic growth and commodity demand.

Palm oil prices, which have lost more than a quarter so far this year, took another hit after funds liquidated their positions in global grains and vegetable oil markets to close up third-quarter books.

Traders are losing faith in officials’ ability to handle the euro zone debt crisis as government draft budget figures on Sunday showed Greece would miss a deficit target set just months ago in a massive bailout package.

The market has really gone down more than it should have purely because of the weak economic outlooks, said a trader with a foreign commodities brokerage in Kuala Lumpur.

But there should be a bounce because palm oil has been oversold and demand is relatively strong.

Funds will have to come in again to corn and soy markets after closing their books in last quarter, pushing up palm oil, he added.

The protracted declines in palm oil will draw in last-minute orders from India ahead of the Hindu festival of Diwali in late October, as well as from China, which will need to restock after the National Day public holidays this week.—Reuters