Palm oil hovers near three-week lows on slow exports

KUALA LUMPUR: Malaysian palm oil futures were flat on Thursday, hovering around three-week lows on concerns over weak demand.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange slipped 3 ringgit, or 0.08%, to 3,908 ringgit ($896.95) a tonne.

India’s palm oil imports in December fell about 2.8% from the previous month to 1.11 million tonnes, while vegetable oil imports rose about 1.3% to 1.57 million tonnes, a trade body said.

Buying from destination markets like India and China is slow as they are already stocked up after Indonesia encouraged strong exports last year, Julian McGill, regional head at agribusiness consultancy LMC International said.

Palm oil production in Malaysia, the world’s second-largest producer, is expected to rise marginally to 19 million tonnes this year, from 18.45 million tonnes in 2022, the Malaysian Palm Oil Board (MPOB) said.

Indonesia’s palm oil output is expected to dip to 50.82 million tonnes this year, from 51.33 million tonnes last year, the Indonesian Palm Oil Association said.

India will halt duty-free imports of crude soyoil from April 1, the government said on Wednesday, as the world’s biggest importer of vegetable oils tries to support local oilseed farmers.

Dalian’s most-active soyoil contract rose 0.4%, while its palm oil contract gained 0.4%. Soyoil prices on the Chicago Board of Trade were up 0.7%.

Malaysia said it could stop exporting palm oil to the European Union in response to a new EU law aimed at protecting forests by strictly regulating sales of the product.