02/05/2023 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures gained ground on Tuesday, recouping losses after the market suffered its deepest monthly drop in seven on weak demand amid larger Indonesian supply.

The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange gained 55 ringgit, or 1.65%, to 3,393 ringgit ($760.93) a tonne by the midday break, setting it on course to end a six-session decline.

In the previous session, the contact hit its lowest closing since September.

The contract rose to adjust to the price movement in related markets during a long Labour Day weekend in Malaysia, but later retraced on demand concerns due to palm oil's unusual premium over competing vegetable oils, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

"Palm oil demand has been constantly under pressure due to a broader selloff seen in the soft oils," he said.

Malaysia's palm oil exports during April fell 18% from the month before, cargo suveyor Intertek Testing Services said.

Indonesia said last week it will lower its mandatory domestic sales threshold for palm oil producers to 300,000 tonnes a month starting in May, although traders said uncertainties over the policy remains.

Soyoil prices on the Chicago Board of Trade BOcv1 rose 0.6%. The Dalian exchange for closed for a public holiday.

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

($1 = 4.4590 ringgit)

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-oil-set-to-snap-six-session-losing-streak