Malaysian palm oil futures dropped 2% on Wednesday, mirroring losses in rival oils, pressured by growing worries over a plunge in demand as more countries go into lockdowns due to the coronavirus pandemic.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 64 ringgit, or 2.66%, to 2,338 ringgit ($537.47) per tonne, after Tuesday's 1.6% drop.
Palm saw its biggest daily percentage fall since March 16.
"Palm traded lower on expectations for reduced purchases moving forward and estimates of better March palm oil production," said Marcello Cultrera, institutional sales manager at Phillip Futures in Kuala Lumpur.
The contract was volatile during the morning session as the market discussed estimates for the official supply and demand data due on April 10, Cultrera added.
Malaysia's palm oil exports in March rose between 6.1% and 6.9% from a month earlier, cargo surveyors said on Tuesday.
However, worries over demand deepened as countries around the world, including key buyers India and the European Union, stayed in lockdowns to contain the spread of the virus.
Palm oil gained 3.6% last month, buoyed by supply concerns as Malaysia imposed a one-month restriction on movement and ordered closure of some operations at its biggest palm producing state, Sabah, until mid-April.
Dalian's most-active soyaoil contract fell 1.65%, while its palm oil contract dropped 1.53%. Soyaoil prices on the Chicago Board of Trade were down 2.07%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Comments
Comments are closed for this article.