KUALA LUMPUR: Malaysian palm oil futures slipped 2% on Wednesday, retreating from the previous session's sharp gains, as concerns over rising production and stockpile pressured prices ahead of official data.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed down 59 ringgit, or 2.06%, to 2,812 ringgit ($674.34) a tonne, after rising 2.4% in the previous session.
"Palm market is lower, tracking the sell-off in equities and a lower Dalian, plus a drop in crude oil prices," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Malaysia's exports in Sept. 1-10 is expected to be strong, Varqa said.
Traders are waiting for August supply and demand data from the Malaysian Palm Oil Board and September export numbers from cargo surveyors, both due on Thursday.
A Reuters survey last week forecast August production rising 2% to 1.84 million tonnes.
Indonesia, the world's largest palm oil producer, plans to revise its palm oil export levy rules to allow higher collection when prices increase, a senior cabinet minister told Reuters, as part of moves to underpin an ambitious biodiesel programme.
In Malaysia, planters are looking to recruit recovering drug addicts and prisoners to solve a severe shortage of foreign workers that has worsened due to a coronavirus-driven border closure.
Dalian's most-active soyaoil contract fell 1.02%, while its palm oil contract slipped 0.98%. Soyaoil prices on the Chicago Board of Trade were down 0.66%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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