JAKARTA: Malaysian palm oil futures dropped nearly 9% on Monday, the biggest daily loss since Jan. 28, 2020, dragged down by the resumption of Indonesian palm oil exports, a decline in soyoil prices and weak Malaysian palm oil export data weighing on the market.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 476 ringgit or 8.73%, to 4,978 ringgit per tonne on Monday, the lowest since Jan.4.
“The resumption of Indonesia’s palm oil exports and expectations of a stronger Malaysian palm oil production recovery in June have further pressured the market,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Indonesia, the world’s top palm oil exporter, had issued permits for shipments of more than 820,000 tonnes of the edible oil under its Domestic Market Obligation scheme and export acceleration programme, as of last week, a trade ministry official said.
Meanwhile exports of Malaysian palm oil products for June 1-20 fell between 10.5% to 17%, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia, adding pressure to the price.
Dalian’s most-active soyoil contract fell 2.34%, while its palm oil contract dropped 4.99%. The Chicago Board of Trade was closed on Monday for the Juneteenth holiday.
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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