KUALA LUMPUR: Malaysian palm oil futures eased on Monday on expectations for rising production and as a surge in COVID-19 cases in top importer India and other countries ignited demand concerns.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 13 ringgit, or 0.35%, to 3,710 ringgit ($900.05) a tonne, after declining to an intraday low of 1.4%. Palm oil has failed to attract fresh buying from destination countries due to high prices and concerns that rising COVID-19 cases India may cause a setback to demand, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
India's capital New Delhi on Sunday recorded 25,500 coronavirus cases in a 24-hour period, with about one in three people tested returning a positive result, raising fears of more lockdown measures.
In Indonesia, the world's top palm oil producer, inventories at end-February are seen falling to 4.04 million tonnes, data from the Indonesia Palm Oil Association (GAPKI) showed on Friday.
"The market is estimating Indonesian palm oil production in March to increase by double digits, while exports are seen increasing multi-fold," Bagani said.
Investors also expect Indonesia to raise its palm oil export duty for May to $144 a tonne from $116 a tonne in April, after rival Malaysia raised its crude palm oil export duty reference price for next month, he added. Dalian's most-active soyaoil contract gained 0.4%, while its palm oil contract rose 0.7%. Soyaoil prices on the Chicago Board of Trade were up 0.02%.
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