JAKARTA: Malaysian palm oil futures posted their biggest single-day loss in over three weeks on Tuesday, as weaker rival oils triggered profit-taking and traders digested palm production and export forecasts.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed 1.63% lower at 5,446 ringgit ($1,301.94) per tonne, the biggest daily lost since Jan. 17.
The contract fell as much as 3.39% earlier in the session, before regaining some footing.
Palm trade was affected “entirely by Dalian behaviour”, a trader in Kuala Lumpur said, adding that the Malaysian benchmark contract was ripe for some profit-taking after hitting a record high of 5,749 ringgit on Monday.
Dalian’s most-active soyoil contract fell 2.61%, while its palm oil contract for May delivery lost 2.67%. Soyoil prices on the Chicago Board of Trade were down 1.36%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Meanwhile, the palm market is trying to determine the next move as production is expected to remain low in February but might pick up in March, the trader said.
High energy prices had provided some cushion for palm oil which is also used as feedstock for biofuel.
Palm oil stockpile at the end of January likely stayed flat in the world’s second-largest producer, as both production and exports plunged to 11-month lows, a Reuters survey showed.
Indonesia, the world’s top palm oil shipper, as of Monday has issued export permits for a combined 310,000 tonnes of crude palm oil and 18,178 tonnes of olein for six companies after it set a mandatory domestic sales and required permits for shipments.
The world’s largest vegetable oil importer India struggle to contain prices at home ahead of important state elections after Indonesia’s move.
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