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Palm oil prices extend losses as market braces for demand plunge due lockdowns

KUALA LUMPUR: Malaysian palm oil futures prolonged losses on Wednesday, monitoring weaker rival oils, and on deepening worries over a plunge in call for as extra countries go into lockdowns because of the coronavirus outbreak.

The benchmark palm oil contract for June delivery at the Bursa Malaysia Derivatives Exchange slid 41 ringgit, or 1.71 in line with cent, to 2,361 ringgit ($546.27) in line with tonne by way of the midday break, after Tuesday's 1.6 in line with cent drop.

"Palm traded lower on expectations for reduced purchases moving forward, and estimates of better March palm oil production," Marcello Cultrera, institutional sales supervisor at Phillip Futures in Kuala Lumpur mentioned.

The contract was once risky all through the morning session as the market mentioned estimates for the reputable provide and insist information due on April 10, Cultrera added.

Malaysia's palm oil exports in March rose between 6.1 in line with cent and 6.nine in line with cent from a month earlier, cargo surveyors mentioned on Tuesday.

However, worries over call for deepened as countries around the world, together with key consumers India and the European Union, stayed in lockdowns to contain the unfold of the coronavirus.

Life in China, the second-largest palm oil buyer, is slowly returning to normal but a private survey confirmed a naked minimal growth in factory task, highlighting the intense drive facing companies as Beijing guards towards a second wave of infections.

Palm oil received three.6 in line with cent last month, buoyed by way of provide considerations as Malaysia imposed a one-month restriction on motion and ordered closure of a few operations at its greatest palm producing state, Sabah, until mid-April.

"We estimate the potential impact on crude palm oil(CPO) output for the two weeks of closure in Sabah is about 132,000 tonnes or 9 per cent of Malaysia’s monthly CPO output," Ivy Ng, regional head of plantations research at CIMB Investment Bank mentioned in a reearch note.

Dalian's most-active soyoil contract fell zero.84 in line with cent, while its palm oil contract dropped zero.16 in line with cent. Soyoil costs at the Chicago Board of Trade have been down 1.26 in line with cent.

Palm oil is affected by worth actions in related oils as they compete for a share within the international vegetable oils market.

Palm oil might revisit its March 30 top of two,466 ringgit in line with tonne, as it has cleared a resistance at 2,387 ringgit, Reuters technical analyst Wang Tao mentioned.

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