Palm oil tumbles 4pc as Malaysia delays stimulus plan amid political turmoil

• The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed to trade down 4.13% to 2,438 ringgit ($582.38), its lowest since Oct. 29.

KUALA LUMPUR: Malaysian palm oil futures ended at a four-month low on Tuesday, pressured by falling exports and a delay in the economic stimulus package amid a political crisis.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed to trade down 4.13% to 2,438 ringgit ($582.38), its lowest since Oct. 29.

On Monday, Malaysia's Mahathir Mohamad unexpectedly quit as prime minister but was immediately reappointed as interim premier and later disbanded the cabinet, sending local currency, bond and stock markets lower.

The political crisis has delayed the announcement of an economic stimulus to counter the coronavirus impact, from Thursday to a "later date", the country's former finance minister said on Tuesday.

Meanwhile, Malaysia's Feb. 1-25 exports fell between 3% and 5% from a month before, according to cargo surveyors on Tuesday. Palm oil exports to the second-largest palm buyer China have lagged due to the fast-spreading coronavirus, sparking demand concerns as global spread of the virus flares up.

The virus has now spread to 29 countries and territories and United Nations Secretary-General Antonio Guterres on Monday urged countries to prevent the epidemic from spiralling into a crisis with "dramatic consequences" for global health and the world economy.

Also denting market sentiment are estimates of February production increasing between 11% and 17% compared with the historical seasonality pattern, said Marcello Cultrera, institutional sales manager at Phillip Futures in Kuala Lumpur.

Palm also tracked losses in rival vegetable oils. Dalian's most-active soyoil contract fell 1.4%, while its palm oil contract tumbled 2.3%. Soyoil prices on the Chicago Board of Trade inched down 1.2%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.