KUALA LUMPUR: Malaysian palm oil futures fell 3% on Tuesday, extending losses to a fourth session, as fresh COVID-19 curbs in key buyer China fuelled concerns about demand amid jitters over top producer Indonesia’s export restrictions.
Investors were also closely watching for new policy changes in Indonesia after the country expanded a rule requiring companies to sell 30% of their planned exports domestically.
Palm plummets nearly 10% as rival Dalian oils, crude weaken
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange slid 196 ringgit, or 3.08%, to 6,165 ringgit ($1,465.07) a tonne during early trade.
Fundamentals
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China reported a steep jump in daily COVID infections on Tuesday, with new cases more than doubling from a day earlier to a two-year high as a virus outbreak expanded rapidly in the country’s northeast.
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Dalian’s most-active soyoil contract fell 1.3%, while its palm oil contract was down 2.6%. Soyoil prices on the Chicago Board of Trade declined 1.1%.
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Oil prices slid to a two-week low on continued ceasefire talks between Russia and Ukraine, making palm a less attractive option for biodiesel feedstock.
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Palm oil may retest a support at 6,104 ringgit per tonne, with a good chance of breaking below this level and falling towards 5,744 ringgit, Reuters technical analyst Wang Tao said.
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