KUALA LUMPUR: Malaysian palm oil futures fell for a second straight day on Tuesday, tracking losses in rival oils, although expectations of a fall in December production limited the decline.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange slid 61 ringgit, or 1.27%, to 4,731 ringgit ($1,117.91) a tonne by the midday break.
Palm futures tracked weaker soyoil and Dalian palm oil prices, although spot prices are holding well, a Kuala Lumpur-based trader said.
The spot contract eased 0.73% but remains near an all-time high at 5,200 ringgit ($1,228.73) a tonne.
"Market may find it difficult to head lower as we are entering lower production season," the trader added.
The Southern Peninsula Palm Oil Millers' Association (SPPOMA) estimated production during Dec. 1-10 fell 2.8% from the same period in November, traders said on Monday.
India's vegetable oil imports in November rose 11% from a year earlier to 1.17 million tonnes, as soyoil imports more than doubled, a leading trade body said.
Dalian's most-active soyoil contract fell 1.4%, while its palm oil contract slipped 0.7%. Soyoil prices on the Chicago Board of Trade were down 0.8%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices fell on investor worries about demand after renewed restrictions were imposed in Europe and Asia amid a rise in coronavirus cases, making palm a weaker option for biodiesel feedstock.
Palm oil may break a support at 4,751 ringgit per tonne, and fall into the 4,625 to 4,676 ringgit range, Reuters technical analyst Wang Tao said.
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