Malaysian palm oil futures closed lower on Tuesday, as demand concerns due to coronarivus-driven global shutdowns outweighed supply disruptions in the world's second-largest palm producer.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 39 ringgit, or 1.6%, at 2,402 ringgit ($556.66) per tonne.
"There are lots of uncertainty in the market. There are certainly worries from both the supply side and demand side of the equation, and we need to wait for official data to have a better perspective of the price trend," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari Sdn Bhd.
In the previous session, palm gained as much as 3.7% on supply concerns after Malaysia extended a shutdown of some plantations and factories until April 14 and widened the order to six districts.
Malaysia's March exports rose between 6.1% and 6.9% from the month before, cargo surveyors said on Tuesday.
March exports improved as there were more trading days compared to February and a brief pick-up in Ramadan demand before the lockdowns were imposed globally, a Kuala Lumpur-based trader said.
Nonetheless, traders in India, the world's largest edible oil buyer, expect vegetable oil demand to fall below the previous year's 23 million tonnes, while the European Union's vegetable oil consumption is also expected to drop as shutdowns forced restaurants to pull down shutters and people to drive less. Dalian's most-active soyaoil contract dropped 1.82%.
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