01/03/2023 (Business Recorder), Kuala Lumpur - Malaysian palm oil futures extended early losses on Tuesday on lacklustre exports and rising production, but were set for an 8.4% monthly gain as flood risk warnings raised concerns about output disruptions.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed down 89 ringgit, or 2.11%, at 4,136 ringgit ($922.19) a tonne.

Exports of Malaysian palm oil products for February fell 0.4% from January, independent inspection company AmSpec Agri Malaysia said, slowing from a surge seen earlier in the month.

Another cargo surveyor, Intertek Testing Services, however, said exports rose 2.3% during the same period.

Meanwhile, the Southern Peninsula Palm Oil Millers Association forecast production during Feb. 1-25 jumped 17% from the month before, traders said.

Malaysia’s Department of Irrigation and Drainage has issued warnings about possible flash floods in several districts in Johor and Sarawak if thunderstorms persist, state media Bernama reported.

Further weakness in the market was triggered by rumours of Indonesia lowering its B35 biodiesel mandate to ensure domestic supply of palm olein until Ramadan, even though the government has denied any such possibility, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

The world’s largest producer plans to set its crude palm oil reference price at $889.77 per tonne for the March 1-15 period, an official at the Economic Coordinating Ministry said, up slightly from $880.03 per tonne set for Feb. 16-28.

Dalian’s most-active soyoil contract fell 0.5%, while its palm oil contract lost 0.5%. Soyoil prices on the Chicago Board of Trade were down 0.3%.

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

https://www.brecorder.com/news/40228926/palm-oil-falls-over-2pc-on-slow-pace-of-exports