JAKARTA: Malaysian palm oil futures extended losses to a third session on Wednesday, dragged down by lower prices of rival vegetable oils in China, while investors awaited official January production and export data due on Thursday.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange fell 2.4% to 5,318 ringgit per tonne in early trading, adding to the 3.11% drop in the last two sessions.
"Our CPO futures are following external leads at the moment until tomorrow's Malaysia Palm Oil Board data," a palm trader in Kuala Lumpur said.
Palm falls most in three weeks
Rival vegetable oil contracts on China's Dalian exchange continued their decline, with the most-active soyoil contract dropping 2.08%, while the palm oil contract for May delivery lost 2.74%.
Soyoil prices on the Chicago Board of Trade were down 0.44%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysia's palm oil stockpile at the end of January likely stayed flat, as both production and exports in the world's second-largest producer plunged to 11-month lows, a Reuters survey showed.
Palm dropped as much as 2.90% earlier on Wednesday before cutting some of the losses. The technical correction was still within "acceptable range" due to recent historic highs, the trader said.
Palm prices have gained 15% so far this year, scaling a record high of 5,749 ringgit earlier this week.
Palm oil may fall further into a range of 5,174 ringgit to 5,247 ringgit per tonne, as it has escaped from the middle channel, Reuters technical analyst Wang Tao said.
Meanwhile, attempts by India, the world's top vegetable oil importer, to lower edible oil prices ahead of important state elections have been ruined by a recent spike in global palm oil prices to record highs after Indonesia, the world's biggest supplier, moved to restrict exports.
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