KUALA LUMPUR: Malaysian palm oil futures fell more than 2% on Thursday, dragged down by lower crude oil prices and demand worries driven by lower exports in the Oct. 1 to 15 period.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed down 75 ringgit, or 2.51%, at 2,914 ringgit ($701.83) a tonne, its second day of losses after a seven-day rally.
Malaysian exports during Oct. 1 to 15 fell 2% compared with the same period in September as shipments to top palm markets China and the European Union declined, according to cargo surveyors' data.
Countries in the European Union, the world's third-biggest palm buyer, are imposing curfews and closing schools as coronavirus cases rise in the region.
Oil prices fell as the new restrictions in the bloc increased uncertainty over the outlook for economic growth and a recovery in fuel demand. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Meanwhile, output this year has been hit by a wetter-than-usual season due to the La Nina weather pattern and as a coronavirus-induced restriction on movement worsens a long-standing labour shortage.
Dalian's most-active soyaoil contract fell 0.7%, while its palm oil contract slipped 1.29%. Soyaoil prices on the Chicago Board of Trade were down 2.19%.