The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 54 ringgit, or 0.83%, to 6,428 ringgit ($1,464.24) a tonne by the midday break, after swinging between slight gains and losses in early trade.
India has allowed duty-free imports of 2 million tonnes each of crude soyoil and crude sunflower oil for the current and the next fiscal year to March 2024 as part of efforts to keep a lid on local prices.
Selling in the front-month contract was seen as Indian buyers are expected to start shifting to other oils after the world’s biggest edible oil buyer lifted the duties, a Kuala Lumpur-based trader said.
Losses were limited as uncertainties over Indonesia’s policy of obligatory domestic sales at a certain price level have hampered the resumption of exports, even after the world’s top producer lifted a three-week ban on shipments effective Monday.
In second-largest producer Malaysia, output for May 1-20 was seen down 13% from the same period in April, traders said citing Malaysian Palm Oil Association data.
Dalian’s most-active soyoil contract rose 0.9%, while its palm oil contract gained 1.3%. Soyoil prices on the Chicago Board of Trade were down 0.2%.
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 a resistance at 6,560 ringgit per tonne, a break above which could lead to a gain to 6,713 ringgit, Reuters technical analyst Wang Tao said.