KUALA LUMPUR: Malaysian palm oil futures fell 4% on Thursday after top producer Indonesia kicked off a scheme to accelerate exports and key buyer China re-imposed COVID-19 lockdowns in Shanghai.
Marking its worst close in nearly three weeks, the benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 259 ringgit to 6,208 ringgit ($1,413.48) a tonne.
Palm suffered its biggest daily decline in five weeks.
The contract was pressured by easing concerns over Indonesia’s export outlook, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Indonesia launched an export acceleration scheme effective immediately, aimed at shipping at least 1 million tonnes of crude palm oil and derivatives following a recent ban, according to a trade ministry regulation made public on Thursday.
Indonesia to cut maximum palm oil export tax and levy to a combined $488/T
The world’s biggest exporter is also lowering the maximum rate of export tax and levy for crude palm oil to $488 per tonne from $575 per tonne to encourage shipments.
Investors are now awaiting the Malaysian Palm Oil Board’s May supply and demand data, as well as early June export numbers from cargo surveyors, due on Friday.
In China, the cities of Shanghai and Beijing went back on a fresh COVID-19 alert after parts of the nation’s largest economic hub started imposing new lockdown restrictions while the most populous district in the Chinese capital shut entertainment venues.
Dalian’s most-active soyoil contract fell 2.6%, while its palm oil contract dropped 5.5%. Soyoil prices on the Chicago Board of Trade were down 1.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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