17.03.2020 (Economic Times) - Malaysian palm oil exports for March 1-15 fell between 1.8% and 9.6% from the month before, according to cargo surveyors.
KUALA LUMPUR: Malaysian palm oil futures rose on Tuesday as supply concerns were raised after the world's second-largest producer ordered two weeks of restricted movement that requires most businesses to shut down in an effort to contain the coronavirus outbreak.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 22 ringgit, or 0.99%, to 2,242 ringgit ($517.54) by the midday break.
Palm had fallen 2.8% in the previous session and has been trading at October levels following a three-month slump pressured by demand concerns as the virus escalated globally.
Malaysia will shut its borders to travellers, restrict internal movement, close schools and universities, and order most businesses to shut from March 18-31 after its number of coronavirus cases climbed to the highest in Southeast Asia.
Malaysia's palm oil plantations must be allowed to operate during the two weeks of restricted movements as it would be damaging to the industry if they were to shut down, the Malaysian Palm Oil Association told Reuters on Tuesday.
"A halt in harvesting activity will rot and perish fresh fruit bunches, leading to zero milling activity and a sap in crude palm oil output, which in turn will stall refinery activities," said Sathia Varqa, owner and co-founder of Singapore-based Palm Oil Analytics.
A weaker ringgit and potentially lower output propped up palm prices on Tuesday and any hint of exemption from the restrictive order will also seen as good news, Varqa said.
The ringgit, palm's currency of trade, fell 0.56% against the dollar, making the edible oil cheaper for holders of foreign currency.
Malaysian palm oil exports for March 1-15 fell between 1.8% and 9.6% from the month before, according to cargo surveyors.
Dalian's most-active soyoil contract fell 0.57%, and its palm oil contract dropped 0.17%. Soyoil prices on the Chicago Board of Trade rose 2.28%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may test a support at 2,184 ringgit per tonne, a break below which could cause a fall to 2,100 ringgit, Reuters technical analyst Wang Tao said.
Read more at: