Indian soyaoil futures fell on Wednesday after a sharp drop in Malaysian palm oil prices on measures to curb speculative trading, while sugar futures extended their falls as a bumper crop kept sentiment depressed.
The June soyaoil futures on the National Commodity and Derivatives Exchange (NCDEX) were down 3.85 rupees at 480 per 10 kg, and July futures had fallen by 5 rupees to 483.
"Soyaoil futures are slightly down because of Malaysia," said a commodity trader in Mumbai. Malaysian crude palm oil futures fell sharply on moves by the exchange regulator to curb speculative trading. The benchmark August contract had fallen 6.5 percent. Bursar Malaysia Derivatives Exchange raised gross margin rates on all contracts, prompting concern among traders that new measures will make hedging more expensive.
Soyaoil prices generally track the trade in Malaysia, the world's top palm oil producer, as both the commodities compete for the same market. India, the world's second-biggest importer of vegetable oils after China, buys palm oil from Malaysia and soyaoil from Brazil and Argentina.
Sugar futures were down on high supplies. India's sugar output is expected to jump to nearly 28 million tonnes in the crop year ending September, from 19.3 million in the previous year.
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