KUALA LUMPUR: Malaysian palm oil futures extended losses to a second session on Tuesday as Dalian prices weakened, but hopes of strong demand ahead of key festivals in China and India capped losses.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange slid 27 ringgit, or 0.9 per cent, to 2,980 ringgit ($ 721.03) a tonne by 0235 GMT. It had snapped a four-session rally to fall 2.4 per cent on Monday.
Exports from Malaysia to the world’s second-largest palm buyer China have picked up ahead of the week-long holiday for the Mid-Autumn festival, starting Oct. 1, according to cargo surveyor data.
Shipments are expected to be steady until next month, with arrivals to top buyer India expected to improve ahead of the Diwali festival there, according to Refinitiv Commodities Research.
Palm oil imports into the European Union and Britain in the 2020/21 season that started on July 1 totalled 1.41 million tonnes by Sept. 20, up from 1.32 million tonnes in the previous season, official EU data showed on Monday.
Dalian’s most-active soyoil contract fell 1.54 per cent, while its palm oil contract dropped 2.45 per cent. Soyoil prices on the Chicago Board of Trade gained 0.45 per cent.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The ringgit, palm’s currency of trade, fell 0.32 per cent against the dollar, making the commodity cheaper for holders of foreign currency.
Asian shares opened weaker on Tuesday on concerns about new pandemic lockdowns in Europe and after reports about financial institutions allegedly moving illicit funds hurt global banking stocks.