Business Recorder (22/01/2020) Malaysian palm oil futures eased on Tuesday, dragged down by uncertainty over output and concerns about lower exports to major customers China and India.

The benchmark palm oil contract, for April delivery, on the Bursa Malaysia Derivatives Exchange pared some losses to end down 12 ringgit, or 0.4%, at 2,890 ringgit ($709.90). The contract earlier fell to an intraday low of 2,819 ringgit.

Palm oil gained 2.3% in the previous session as bargain-buying fuelled its biggest daily jump since Jan. 2.

“Lower Jan. 1-20 exports, coupled with a rising production outlook, weighed down the market this morning," said Sathia Varqa, owner and co-founder of Singapore-based Palm Oil Analytics.

He was referring to a forecast by the Southern Peninsular Palm Oil Millers' Association for an 8.33% on-month rise in production during first three weeks of January.

However, the market recovered from the session's lows after data from six producers and refiners showed January production is likely to decline 10%, raising concerns that inventories could fall 10-13%, said Marcello Cultrera, institutional sales manager at Phillip Futures in Kuala Lumpur.

“Nonetheless, the short-term leading concern is the lack of palm demand," he said.

Malaysia's Jan. 1-20 palm oil exports fell between 7.4% and 9.9% from the month before, according to cargo surveyors.

Exports to China, the second-largest importer, have been low ahead of the Lunar New Year holidays, Cultrera said.

Concerns over lower exports to India, the world's biggest buyer of edible oils, also hit market sentiment.

Elsewhere, Dalian's most-active soyaoil contract fell 2.16%, while its palm oil contract slid 2.6%. Soyaoil prices on the Chicago Board of Trade were 1% lower.

Read more at https://www.brecorder.com/2020/01/22/563627/malaysian-palm-oil-dips/