Malaysian palm oil futures closed lower on Monday as worries deepened over the damage to demand after many nations enforced lockdowns to contain the spread of the coronavirus pandemic. The benchmark palm oil contract, for June delivery, on the Bursa Malaysia Derivatives Exchange closed 0.22% lower at 2,283 ringgit ($514.19) per tonne. It fell as much as 3.1% during the session.
The situation is gloomy on the demand front as big importers like India, Europe and the Middle East have struggled with lockdown measures, said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil broker.
Several states in India, the top global palm oil buyer, have extended lockdowns till March 31. Major nations have imposed such moves that have raised concerns of a global slowdown and dimmed the outlook for commodities.
"There is no fresh demand, palm oil demand has evaporated," Bagani said. Malaysia's March 1-20 exports fell between 20% and 21% from the month before, cargo surveyors said on Friday. Dalian's most-active soyaoil contract gained 0.63%, while its palm oil contract was down 2.35%. Soyaoil prices on the Chicago Board of Trade were trading up 0.2%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.