Malaysian palm oil futures fell for the third straight session on Wednesday on lower-than-expected exports and tracking losses in rival edible oils, while the market worried about diplomatic tensions between Malaysia and India.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed down 60 ringgit, or 2%, at 2,945 ringgit ($722.88). Malaysian palm oil exports for Jan. 1-15 rose between 3% and 5.8%, cargo surveyors Amspec Malaysia and Intertek Testing Services said on Wednesday, but it was lower than had been expected.
On Tuesday, the contract slumped 2.8%, the biggest fall in eight months, after Malaysia's prime minister defended his criticism of India's religion-based citizenship law and its actions in Kashmir, even as New Delhi halted palm oil imports from the world's second-largest producer.
India, the world's biggest buyer of edible oils, last week restricted imports of refined palm oil and informally instructed traders to stay away from Malaysian palm oil. The move has effectively stopped all purchases from top supplier Malaysia, industry and government sources told Reuters.
Supporting prices are forecasts of lower January production and tighter supplies in the first half of 2020 due to dry weather and lower fertiliser usage early last year. Dalian's most-active soyaoil contract fell 1.7%, while its palm oil contract dipped 1.8%. CBOT soyaoil prices were down 0.8%.