KUALA LUMPUR (Reuters) - Malaysian palm oil futures fell for the third straight session on Wednesday on lower-than-expected exports and tracking losses in rival edible oils, while the market worried about diplomatic tensions between Malaysia and India.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed down 60 ringgit, or 2%, at 2,945 ringgit ($722.88).
Malaysian palm oil exports for Jan. 1-15 rose between 3% and 5.8%, cargo surveyors Amspec Malaysia and Intertek Testing Services said on Wednesday, but it was lower than had been expected.
On Tuesday, the contract slumped 2.8%, the biggest fall in eight months, after Malaysia’s prime minister defended his criticism of India’s religion-based citizenship law and its actions in Kashmir, even as New Delhi halted palm oil imports from the world’s second-largest producer.
India, the world’s biggest buyer of edible oils, last week restricted imports of refined palm oil and informally instructed traders to stay away from Malaysian palm oil.
The move has effectively stopped all purchases from top supplier Malaysia, industry and government sources told Reuters.
“Palm oil is down on the absence of Indian buying and reports of a washout on refined palm oil volume sold to India,” said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.
Supporting prices are forecasts of lower January production and tighter supplies in the first half of 2020 due to dry weather and lower fertiliser usage early last year.
Dalian’s most-active soyoil contract fell 1.7%, while its palm oil contract dipped 1.8%. CBOT soyoil prices were down 0.8%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Nick Macfie