18.02.2021 (in.investing.com) - KUALA LUMPUR, Feb 18 (Reuters) - Malaysian palm oil futures fell to a one-week low on Thursday, reversing the previous session's gains on fears of lower demand and as Malaysia raised its reference price for March export tax.

The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange closed down 142 ringgit, or 3.91%, to 3,490 ringgit ($863.86) a tonne.

Palm fell to an intraday low of 5% during the session to its lowest since February 8.

"Market turned negative today, mainly due to demand fears in March," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

Higher tax rate in March and the upcoming peak production months also kept a lid on prices, he added.

Malaysia maintained its March export tax for crude palm oil at 8% but raised the reference price to 3,977.36 ringgit per tonne, a circular on the Malaysian Palm Oil Board website showed on Thursday. further pressure on the market is lower local palm prices at destination markets like India, Pakistan and Bangladesh compared with the benchmark crude palm oil prices, a Kuala Lumpur-based trader said.

"We'll be losing market share in destination markets," the trader said.

Malaysia's Sime Darby Plantation, the world's largest palm oil planter, forecast crude palm oil output in Malaysia and Indonesia would recover from last year's decline, and is optimistic prices will remain high this year. most-active soyoil contract DBYcv1 rose 2.9%, while its palm oil contract DCPcv1 increased 3.7%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.5%.

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

($1 = 4.0400 ringgit)

https://in.investing.com/news/vegoilspalm-oil-slumps-4-on-demand-concerns-high-export-tax-2615338