Malaysian palm oil futures closed at a more than six-month low on Thursday, hurt by the country's decision to delay its biodiesel mandate, while prospects of higher output and slower exports amid coronavirus-led lockdowns also dented sentiment.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange ended 36 ringgit lower, or 1.6%, at 2,203 ringgit ($504.12) per tonne, its lowest since Oct. 15, 2019. The contract had climbed as much as 0.44% during the session.
Malaysia's Commodities Ministry aims to delay adoption of its B20 biodiesel mandate nationwide amid movement curbs to rein in COVID-19, the Malaysian Biodiesel Association said.
The market will be looking at whether Indonesia will also make any changes to its B30 biodiesel mandate, a Kuala Lumpur-based trader said. Malaysia's palm oil exports during April 1-15 fell between 3.6% and 6%, according to cargo surveyors on Wednesday.
The Malaysian Southern Peninsular Palm Oil Millers Association estimated April 1-15 production to pick up by 25%, traders said. Dalian's most-active soyaoil contract gained 0.22%, while its palm oil contract fell 2.43%. Soyaoil prices on the Chicago Board of Trade were also down 0.22%.