KUALA LUMPUR: Malaysian palm oil futures ended lower on Thursday, surrendering some gains after hitting a 12-day closing high in the previous session, as poor demand weighed on sentiment.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 67 ringgit, or 1.69%, to 3,893 ringgit ($880.37) a tonne.
Exports of Malaysian palm oil products for Dec. 1-20 fell 2.1% to 923,642 tonnes from Nov. 1-20 as shipments to key market China plunged, cargo surveyor Societe Generale de Surveillance said on Wednesday.
Demand from China has slowed as COVID-19 swept through the world’s most populous country largely unchecked for the first time after an abrupt shift in the country’s containment policies.
The world’s largest palm oil producer Indonesia’s 2022 palm oil exports are estimated at 34.67 million tonnes, down from last year’s 37.78 million tonnes, partly due to a temporary export stoppage in April, the chief executive of its palm oil fund BPDPKS said.
The agency revised down its estimate of crude palm oil inventory by the end of 2023 to 4.37 million tonnes as the country expands its mandatory biodiesel blending programme.
Worries over floods in Malaysia disrupting supply and hurting production in the world’s second-largest producer, however, helped limit losses.
Malaysian towns were left inundated with muddy water in the wake of torrential rains, footage shared on social media and verified by Reuters showed, forcing more than 72,000 people to evacuate as rainfall and floods were forecast to persist.
Dalian’s most-active soyoil contract fell 0.7 percent, while its palm oil contract lost 1 percent. Soyoil prices on the Chicago Board of Trade were down 0.2 percent.
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