27.03.2020 (Business Recorder) - Malaysian palm oil futures closed lower on Thursday as worries over a disruption in demand deepened after several nations, including top buyer India, enforced lockdowns to stem the spread of the coronavirus.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange ended 24 ringgit lower, or 1.01%, to 2,359 ringgit ($544.80) per tonne.
The closure of major ports around the world is resulting in shipping operations going awry. This coupled with demand worries is adding to the selling pressure, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari Sdn Bhd.
Malaysia's palm oil exports for March 1-25 fell between 11.7% and 13.6% on weak demand amid the virus outbreak, according to data by cargo surveyors.
Denting sentiment further was a firmer ringgit, up 1.3% against the dollar. Gains in the ringgit, palm's currency of trade, make the edible oil more expensive for holders of foreign currency.
Dalian's most-active soyaoil contract fell 1.52%, while its palm oil contract dipped 1.66%. Soyaoil prices on the Chicago Board of Trade were down 0.19%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysia's relationship with its biggest customer India is expected to improve after New Delhi lifted a 5% import duty on the edible oil, Malaysia's commodities minister said on Wednesday.
Meanwhile, the second-largest palm producer on Wednesday extended a two-week virtual lockdown to mid-April, a day after suspending some palm operations as virus cases surged.
Copyright Reuters, 2020