Malaysian palm oil futures fell 3% on Monday, dragged down by demand concerns and weaker oil prices as governments across the globe imposed lockdowns to contain the coronavirus outbreak.
The benchmark palm oil contract, for June delivery, on the Bursa Malaysia Derivatives Exchange was down 3.1% at 2,217 ringgit per tonne by 0240 GMT. It gained 3.2% on Friday.
More countries have ordered lockdowns and restrictions to curb the coronavirus’ spread, with nearly one in three Americans under orders to stay home and Australia shutting down pubs, clubs, gyms and houses of worship.
Those moves have worsened fears of a slowdown in global economic growth and sent oil prices slumping on Monday. Weaker oil futures make palm a less attractive option for biodiesel feedstock.
FUNDAMENTALS
* Malaysia’s March 1-20 exports fell between 20-21% from the month before, cargo surveyors said on Friday.
* Dalian’s most-active soyoil contract gained 0.52%, while its palm oil contract was down 2.22%. Soyoil prices on the Chicago Board of Trade were trading 0.51% lower.
* 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 retest 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.
MARKET NEWS
* Oil prices fell on Monday as governments escalated lockdowns to curb the spread of the global coronavirus outbreak that has slashed the demand outlook for oil and threatened a global economic contraction.
* Asian shares sank on Monday as a rising tide of national lockdowns threatened to overwhelm policymakers’ frantic efforts to cushion what is likely to be a deep global recession.
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