Malaysian palm oil: plunged to a one-month low of MYR 5,700 a tonne in the third week of March and are now on track for their worst week in over 30 years after Indonesia surprised markets and removed its export restrictions on palm oil products.
The world’s top producer has raised its export levy instead of asking producers to sell 30% of their planned exports to the domestic market, marking a new bid to stabilize domestic prices. Palm oil was already under pressure following a slightly bearish report from the Malaysian Palm Oil Board and concerns about demand amid new COVID-19 restrictions in top buyer China.
The MPOB report showed that inventories at the end of February were down much less than market expectations, while exports declined over 5% to 1.1 million tonnes. Still, output in the world’s second-largest palm oil producer plunged 9.3% to 1.14 million tonnes, a level not seen in a year, hit by labour shortages and flooding.