- Palm falls 0.87%
- Market hopes Malaysia lowers export tax reference price
KUALA LUMPUR: Malaysian palm oil futures closed lower on Thursday for a second straight session, weighed by weakness in rival soyoil ahead of the country's export tax announcement.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed down 36 ringgit, or 0.87%, to 4,113 ringgit ($974.30) a tonne.
The market is waiting for Malaysia to announce its crude palm oil export tax for August, with hopes that the world's second-largest exporter will lower its reference price, a Kuala Lumpur-based trader said.
"More selling is expected as soybean complex is showing more weakness."
Exports of Malaysian palm oil products for July 1-20 fell 9.6% to 869,542 tonnes compared with the same period in June as shipments to India and China declined, according to data from cargo surveyor Societe Generale de Surveillance on Wednesday.
The Indonesian Palm Oil Association (GAPKI) said production would go on undisrupted amid the pandemic, but the country may see spillover effects and logistic issues in the near term, UOB Kay Hian analysts said in a note.
"Transport of fertilisers and equipment have been delayed after the re-imposition of movement control in many parts of Java and Sumatra," UOB Kay Hian said.
Crude palm oil prices may stay elevated with support from historically high soyoil prices, but prices may be pressured towards the fourth quarter as Indonesia's production picks up strongly, it said.
Dalian's most-active soyoil contract fell 1%, while its palm oil contract eased 0.3%. Soyoil prices on the Chicago Board of Trade were down 1.8%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.