VEGOILS-Palm slips on weaker soyoil, demand worries as virus cases surge
By Mei Mei Chu
KUALA LUMPUR, May 4 (Reuters) - Malaysian palm oil futures slipped on Tuesday, trimming some of the previous session's gains, due to weakness in rival soyoil and demand concerns as COVID-19 cases surge globally.
The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange slid 17 ringgit, or 0.42%, to 4,044 ringgit ($983.94) a tonne, after rising 5% on Monday.
"Albeit there's tightness in competing vegetable oils, the market today is a little nervous as buyers remain on the sidelines," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Many traders have cited the possibility of top producer and rival Indonesia reducing its levy by $100, which would make Indonesian palm oil more competitive, he added.
Malaysia, the world's second-largest producer of palm oil, is facing a spike in coronavirus cases with more than 415,000 total infections, and has reported its first case of an infectious variant first identified in India.
Top importer India on Monday reported more than 300,000 new coronavirus cases for a twelfth straight day, as the country struggled with a devastating second wave of the virus.
Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.06%. The Dalian exchange is closed until May 5 for holidays.
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 retreat into a zone of 3,967 ringgit to 4,010 ringgit per tonne, following its failure to break a resistance at 4,098 ringgit, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.1100 ringgit)
(Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Vinay Dwivedi)
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