KUALA LUMPUR: Malaysian palm oil futures eased on Tuesday on rising expectations top producer Indonesia would soon lift a ban on exports amid farmers’ protests against the policy, although there was no clear timeline on when shipments will restart.
Resuming trade after a long weekend, the benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange dropped 25 ringgit, or 0.41%, to 6,114 ringgit ($1,393.35) a tonne.
The fall was due to rumours Indonesia would lift its ban on palm exports imminently, a Kuala Lumpur-based trader said.
The market has been waiting for Indonesia to end the ban which has lifted prices of all edible oils, sowed confusion among exporters and even sparked protests, but there is no clarity on when the announcement would be made.
“The elephant in the room remains Indonesia’s continued ban on palm oil exports, now into its third week, and how long the ban will continue, in the face of fast-dwindling storage capacity and widespread protests by farmers,” Refinitiv Agriculture Research wrote in a note.
Jakarta has said the ban would stay in place until bulk cooking oil prices drop to 14,000 rupiah ($0.9563) per litre across Indonesia. Bulk cooking oil was priced on average at 17,300 rupiah per litre as of Friday, according to Trade Ministry data.
“Market ignored strong gains in energy markets and selling activities may continue if export ban is lifted,” the trader said.
Capping losses, exports of Malaysian palm oil products for May 1-15 rose between 20% and 29% from the same week in April, cargo surveyors said.
The news of India banning exports of wheat on Saturday put some pressure on soyoil futures amid questions of ripple effects it could have on import demand for vegetable oils.
Soyoil prices on the Chicago Board of Trade were down 0.4%. Dalian’s most-active soyoil contract fell 0.6%, while its palm oil contract lost 1.8%.
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