The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange slid 53 ringgit, or 0.83%, to 6,330 ringgit a tonne by the midday break.
The contract is tracking weaker soyoil, pressured by forecast of good planting weather, as well as concerns about demand from China, a Kuala Lumpur-based trader said.
Plunging demand for soyoil in China is expected to cut consumption of the oilseed in the world’s biggest user as lockdowns to prevent the spread of COVID have shuttered restaurants and canteens, according to traders and analysts.
ICE Canada canola futures fell on Wednesday after Russia reportedly said it is ready to provide a humanitarian corridor for vessels carrying food to leave Ukraine, a major sunflower oil producer, in return for the lifting of some sanctions.
A resumption of Black Sea sunflower oil shipments could help alleviate global supplies, the trader quoted earlier said, adding that there are also concerns about slower palm oil exports to India after the world’s biggest edible oil buyer scraped import duties for competing soy and sunflower oils
Soyoil prices on the Chicago Board of Trade were down 0.5%. Dalian’s most-active soyoil contract fell 1.6%, while its palm oil contract eased 0.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
In top palm oil producer Indonesia, the government will determine palm oil producers’ mandatory domestic sales volume based on their refining capacity and local demand for cooking oil, a trade ministry regulation document showed on Wednesday, as the government plans an industry audit.