KUALA LUMPUR: Malaysian palm oil futures ended lower on Wednesday, erasing gains made in the previous session, as signs of progress in Russia-Ukraine peace talks boosted hopes of an end to a conflict that has roiled global supply of commodities, including edible oils.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 93 ringgit, or 1.54%, to 5,927 ringgit ($1,410.18) a tonne.

Crude and soyoil prices fell overnight after Russia promised to scale down military operations around Kyiv and another city.

However, Ukraine reacted with scepticism as some Western countries expected Moscow to intensify its offensive in other parts of the country.

Palm slips on forecast of higher output, slowing exports

“The uncertainty surrounding the news of ceasefire talks between Ukraine and Russia kept the market nervous today,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

“Buyers are only buying at dips, which explains the prevalence of defensive tone in our market.”

Top producer Indonesia set its crude palm oil reference price for April at $1,787.5 per tonne, up from March’s $1,432.24 per tonne, a trade ministry regulation showed.

Indonesia’s palm oil export levy collection in 2022 is estimated at 68.18 trillion rupiah ($4.76 billion), down from last year’s 71.6 trillion rupiah, said Eddy Abdurrachman, head of the palm oil fund agency.

In related oils, soyoil prices on the Chicago Board of Trade were up 0.6%. Dalian’s most-active soyoil contract fell 0.4%, while its palm oil contract slipped 0.4%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.