JAKARTA: Malaysian palm oil futures reversed course to fall 0.9% on Friday, as cheaper American and Chinese rival oils and worries of lower demand from India due to the surge in COVID-19 cases dragged prices.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange traded at 3,902 ringgit ($951.01) per tonne by midday, after touching 3,996 ringgit earlier in the session.
A Kuala Lumpur-based trader told Reuters that external markets’ moves weighed on palm prices.
The Dalian Commodity Exchange’s soyoil and palm oil contracts also declined 1.5% and 1.3%, respectively, due to profit-taking ahead of the weekend, traders said.
Rival soy oil on the Chicago Board of Trade slipped 0.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Denting sentiment further, top palm importer India posted a record daily rise in coronavirus cases of 386,452 on Friday, while deaths jumped by 3,498.
However, higher palm oil exports from both Malaysia and Indonesia provided some cushion to the weakness.
Exports of Malaysian palm oil products for April rose 9.7% from March, data from independent inspection company AmSpec Agri Malaysia showed.
Indonesia’s exports, meanwhile, surged in the first quarter of this year, while end stocks remained low. Indonesia palm oil association (GAPKI) said on Wednesday demand for palm oil increased due to uncertainty in planting and production of other oilseeds.