Malaysian palm oil futures fell on Wednesday on demand worries after top buyer India imposed a three-week lockdown to stem the spread of the coronavirus, but supply concerns after Malaysia suspended some palm operations capped losses.
The word’s largest edible oil consumer India ordered a 21-day lockdown of its 1.3 billion people on Tuesday to try to protect the country from the coronavirus, which is spreading around the world.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 13 ringgit, or 0.51 per cent, to 2,341 ringgit ($530.72) per tonne during early trade. Palm had gained 2.71 per cent in the previous session.
Malaysia’s largest palm oil producing state, Sabah, on Tuesday ordered the temporary closure of plantations and factories in three districts after seven workers tested positive for the virus.
Palm oil production in Indonesia, the world’s top palm producing nation, is expected to reach 43.5 million tons in 2020-21 due to lower fertiliser input and poor rainfall last year, while palm oil exports are expected to fall due to the pandemic, according to a US Department of Agriculture attaché in Jakarta.
Dalian’s most-active soy oil contract gained 0.51 per cent, while its palm oil contract jumped 1.91 per cent. The soy oil prices on the Chicago Board of Trade dipped 0.19 per cent.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
($1 = 4.4110 ringgit)