KUALA LUMPUR: Malaysian palm oil futures slumped more than 3% on Monday, their biggest fall in nearly a month, as sharp losses in rival Dalian and CBOT soyabean oil outweighed expectations for an uptick in October exports.
The benchmark palm oil contract, for January delivery, on the Bursa Malaysia Derivatives Exchange settled down 94 ringgit, or 3.28%, to 2,776 ringgit ($670.53), its biggest intraday fall since Sept. 24 and lowest closing level since Oct. 6.
Market rumours ahead of cargo surveyor data due Tuesday indicated that shipments from Malaysia during Oct. 1-20 rose 4%-5% on month, traders said.
But the rise was not high enough to overcome the selling pressure from the Dalian Commodity Exchange, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
"Also, the global pandemic hogging the limelight is not doing any good to demand outlook," he added.
Dalian's most-active soyaoil contract slipped 1.8%, while its palm oil contract fell 3%. Soyoil prices on the Chicago Board of Trade were down 1.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Daily coronavirus infections in Malaysia, the world's second largest palm oil producer, have topped a record high of over 800 cases over the past three days, while major importer Europe have in recent weeks emerged as the new epicentre.
"The fall in futures prices will depress cash prices and attract physical product buyers," Varqa said.
Uncertainties over the imposition of levy on Indonesian crude palm oil also pressured the market, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari Sdn Bhd.
Top palm producer Indonesia last month raised its export tax for crude palm oil to $3 per tonne for shipments in October, and is expected to announce its November export tax by the end of the month.