Malaysian palm oil futures reversed early gains on Thursday, falling over 2% on concerns of a prolonged slump in global demand due to the coronavirus pandemic.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 54 ringgit, or 2.3%, at 2,303 ringgit ($530.03) per tonne, snapping a three-day rally.

Palm oil producers must brace for crude palm oil prices to fall sharply as coronavirus-led lockdowns around the world curb consumption and boost stockpiles, leading industry analyst James Fry told Reuters.

"Export volumes are likely to be very weak from Indonesia and Malaysia in 2020," Fry said, adding a weakend global economy due to the pandemic will also curb demand in the long term.

Palm had gained as much as 2.2% during the session, on supply disruption concerns as Malaysia's biggest palm oil-producing state continued to close some palm operations as part of its coronavirus containment measures.

"Uncertainty prevailed over Malaysian and Indonesian plantation operations, and the market is worried about a cut in palm oil production if there is a further delay on the reopening of closed plantations," said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.

The Malaysia Palm Oil Board is scheduled to release its supply and demand data on Friday, and the production figures are likely to be a "surprise element", Bagani added.

Dalian's most-active soyaoil contract gained 3.05%, while its palm oil contract jumped 2.09%. Soyaoil prices on the Chicago Board of Trade were also trading up 0.7%.

Oil prices rose on Thursday on expectations the world's leading crude producers will overcome obstacles at a meeting later in the day that have so far prevented a deal to cut output in response to a collapse in global demand.