The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 91 ringgit, or 1.83%, to 4,890 ringgit ($1,112.37) per tonne in by midday.
“The (palm oil) contract is having a bear run on the back of renewed China lockdowns, which could lead to lower demand, as well as Indonesia ramping up exports to clear overflow of palm oil reserves,” a Kuala Lumpur-based trader told Reuters.
Indonesia has issued permits to ship more than 1.4 million tonnes of the edible oil as of Monday, to reduce inventories that have prevented refiners from buying more palm fruits from farmers.
The country also set its July crude palm oil reference price at $1,615.83 per tonne, which would place the export levy and export tax at a maximum $200 per tonne and $288 per tonne, respectively.
Meanwhile, exports of Malaysian palm oil products for June 1-20 fell between 10.5% and 17%, compared with a month earlier, according to cargo surveyors Intertek Testing Services, Societe Generale de Surveillance and independent inspection company AmSpec Agri Malaysia.
Dalian’s most-active soyoil contract fell 2.78%, while its palm oil contract dropped 3.03%. Soyoil prices on the Chicago Board of Trade slid 1.60%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may bounce into a range of 5,086 ringgit to 5,204 ringgit, as it has found a support at 4,896 ringgit per tonne, Reuters technical analyst Wang Tao said.
($1 = 4.3960 ringgit)