KUALA LUMPUR: Malaysian palm oil futures extended losses for a third straight session on Monday, plummeting as much as 9.8%, as rival Dalian oils and crude futures weaken and investors booked profits after last week’s sharp gains.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed down 367 ringgit, or 5.47%, at 6,340 ringgit ($1,508.81) a tonne. The contract had gained about 20% in the last three weeks.
Argentina has halted registration of export sales of soy oil and meal, the South American country’s government said on Sunday, a move that stops sales and exports of the 2021/22 crop from the world’s top exporter of processed soy products.
This is slightly bearish as traders anticipate the South American nation to raise export taxes on soy oil and meal from the current 31%, which will lower local prices, a Kuala Lumpur-based trader said.
Argentina’s curbs come on the heels of top palm oil producer Indonesia’ move to expand a policy requiring companies to sell 30% of their planned exports domestically, up from 20%, which pushed palm prices to historical highs last week.
Agriculture ministers of the G7 group of nations on Friday urged global food exporting countries not to restrict food exports after Russia’s invasion of Ukraine cut world supplies, including sunflower oil.
Soyoil prices on the Chicago Board of Trade fell 1.4%. Dalian’s most-active soyoil contract fell 2.9%, while its palm oil contract plunged 8%.
Oil prices fall as much as $4 a barrel, extending last week’s decline as diplomatic efforts to end the war in Ukraine were stepped up and markets braced for higher US rates.
Weaker crude futures make palm a less attractive option for biodiesel feedstock.
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