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Malaysian palm oil futures rose 1.7% on Thursday, tracking gains in soyoil on the Chicago Board of Trade (CBOT) following a United States Department of Agriculture (USDA) report that showed stockpiles were lower than expected.

Palm oil prices may decline slightly towards the end of this year from the current strong level, said IOI Corp Bhd group managing director (MD) and chief executive Datuk Lee Yeow Chor.

Shares in Malaysian palm oil producer FGV Holdings Bhd plunged nearly 10% on Thursday after the United States banned its products over forced labour allegations, a move analysts warned could have a ripple effect across the industry.

The main index of Bursa Malaysia started the final quarter of 2020 on a weaker note and stayed below the 1,500-point level as the Malaysian manufacturing sector showed signs of losing momentum at the end of the third quarter, while index-linked plantation stocks dragged.

Malaysia said Thursday it would take action against companies that violate labor laws and would send a comprehensive study on the situation in the country’s palm oil sector to the United States to avoid further American restrictions on the commodities.

Crude palm oil futures surged to Rs 764.50 per 10 kg on October 1 as participants increased their long position as seen by the open interest.

Plantation companies with large oil palm estates in Sabah are back on high alert mode following the stricter enhanced movement control order (EMCO) lockdown in LahadDatu, Tawau, Kunak and Semporna, say industry players.

FGV Holdings Bhdhttps://cdn.thestar.com.my/Themes/img/chart.png says it is "disappointed" in the US Customs and Border Protection's (CBP) ban on the import of its palm oil products, and will engage with the agency towards clearing its name.

The United States has banned imports of palm oil from Malaysian company FGV Holdings following an investigation into allegations it uses forced labour, the U.S. Customs and Border Protection (CBP) agency said on Wednesday.

Malaysian palm oil fell for a second day on Wednesday and was set to end September with a small decline, as it tracked the drop in vegetable oil trade in China just before a week-long holiday.

Palm oil is now facing an almost insurmountable challenge in its bid to replace fossil fuel as an energy source.

Exports of Malaysian rubber products could catch up with – and even overhaul – the country’s palm oil-based manufactured products, as demand for gloves and personal protective equipment (PPE) prevails with a global shortage caused by the Covid-19 pandemic.