Business Recorder (27/11/2019) - Malaysian palm oil futures slumped about 3.6% on Tuesday, their biggest intraday drop in nearly seven months, as weaker rival oils on China's Dalian Commodity Exchange and expectations of lower imports by key buyer India weighed on sentiment.

The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange dropped as much as 3.6% to 2,634 ringgit, its lowest since Nov. 19, before recovering slightly to end down 2.2% at 2,674 ringgit ($641.25).

Two traders attributed the sharp fall to cheaper Dalian alternatives. Dalian's January palm oil contract fell nearly 4% on Tuesday, while the soyaoil contract slid 2.2%. Soyabean oil on the Chicago Board of Trade declined 0.3%.

Dalian palm futures fell on higher imports of the vegetable oil by China in October and expectations of more shipments in November and December, said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.

Palm oil is affected by price movements in related oils as they compete for share in the global vegetable oils market.

A Kuala Lumpur-based trader said Malaysian palm prices plunged because of a correction after some recent overbuying.

Palm oil futures have jumped 27% in five weeks, hitting a two-year high of 2,760 ringgit on Monday, on prospects of lower production and stockpiles.

A report that palm oil imports by India for the next four months would fall as high prices prompt buyers to shift to rival oils such as soyaoil and sunflower oil also pressured the market. A slightly weaker ringgit, however, limited losses. The Malaysian currency slipped 0.1% against the dollar, making the edible oil cheaper for holders of foreign currencies.

Read more at https://www.brecorder.com/2019/11/27/547900/palm-oil-posts-steepest-intraday-drop-in-nearly-7-months/