Malaysian palm oil futures ended lower on Tuesday, hovering near a 10-month low hit last week, dragged by a higher-than-expected surge in April inventories amid slow exports due to the coronavirus pandemic.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange settled down 1.3%, at 1,994 ringgit ($460.72) per tonne. The contract traded near its lowest since last July.
Malaysia's April palm oil inventories jumped 18.3% to 2.05 million tonnes from the previous month, the highest since December, according to the Malaysian Palm Oil Board (MPOB) data on Tuesday.
"The overall trend remains down and now the market is expected to trade lower," said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.
India, the world's largest edible oil buyer, has suspended 39 licences to import 452,303 tonnes of refined palm oil after a surge in duty-free purchases from neighbours such as Nepal and Bangladesh which are not key producers.
"The suspension is adding some pressure on the contract as it affects firms importing from Nepal and Bangladesh only," a Kuala Lumpur-based trader said.
Palm oil climbed 4% in the previous session on hopes of a revival in demand as countries begin to ease coronavirus-led restrictions.
Malaysia palm oil exports during May 1-10 rose between 7.8% and 11.9% from the previous month, according to cargo surveyors.
European Union palm oil imports in the 2019/20 season stood at 4.78 million tonnes by May 10, down 15% from a year-ago period, official EU data showed on Monday.
Indonesia is likely to delay plans to raise bio-content in palm oil-based biodiesel to 40%.
Dalian's most-active soyaoil contract fell 1.34%, while its palm oil contract was down 2.03%.
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