By Mei Mei Chu
KUALA LUMPUR, Jan 17 (Reuters) – Malaysian palm oil futures reversed early gains on Tuesday, weighed by growing concerns of slowing export demand on talks of higher Indian import duty and reports of weak China economic data.
The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange lost 55 ringgit, or 1.43%, to 3,797 ringgit ($877.92) a tonne.
Palm oil earlier received support from tight supplies as some planters estimated an 11%-15% fall in production for the Jan. 1-15 period from the month before, a Kuala Lumpur-based trader said.
But the contract was pressured by lower exports, weakness in crude oil prices and a record soybean crop in Brazil, the trader added.
Exports of Malaysian palm oil products for Jan. 1-15 fell 28.5% to 453,771 tonnes from 634,618 tonnes shipped during Dec. 1-15, cargo surveyor Societe Generale de Surveillance said.
“India may raise import tax on palm oil products in the upcoming budget as farmers are ready to harvest their domestic winter oilseed crops and inflation is under control,” said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
Further stoking demand woes, China’s economic growth in 2022 slumped to one of its worst levels in nearly half a century as the fourth quarter was hit hard by strict COVID curbs and a property market slump, raising pressure on policymakers to unveil more stimulus this year.
India and China are two of the world’s biggest palm oil importers.
Meanwhile, Dalian’s most-active soyoil contract DBYcv1 gained 0.4%, while its palm oil contract DCPcv1 rose 0.05%. Soyoil prices on the Chicago Board of Trade BOcv1 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.
The ringgit MYR=, palm’s currency of trade, fell 0.28% against the dollar, making the commodity cheaper for buyers holding foreign currency.
Bursa Malaysia will be closed on Jan. 23 and 24 for the Chinese New Year holidays.
($1 = 4.3250 ringgit)
(Reporting by Mei Mei Chu; editing by Uttaresh.V, Subhranshu Sahu and Janane Venkatraman)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.