KUALA LUMPUR, March 12: Malaysian palm oil futures slipped more than 3 per cent on Wednesday as China’s Dalian soyoil market plunged on fresh concerns that Beijing may release more vegetable oil stocks to arrest spiralling inflation.

Chicago Board of Trade soybean futures also reversed gains and fell during Asian trade.

The talk about China selling its stocks is the main event of the day, said one trader with a domestic brokerage. China has a lot of oil which means palm oil exports will slow down in the coming months.

The benchmark May contract on the Bursa Malaysia Derivatives Exchange fell as much as 143 ringgit, or 3.7 per cent, to 3,695 ringgit a ton.

The contract finished down 73 ringgit at 3,765 ringgit a ton on media reports that India was likely to reduce import tax on vegetable oils by more than 10 per cent.

Dealers said lack of demand from India and China, the world’s top edible oil consumers, is likely to keep prices under pressure.

China is not buying much and India also seems to be playing the same game, said another trader. Buyers are waiting for prices to fall further and then they will enter.

Palm oil, used for cooking and in products ranging from biscuits to biofuels, is down 16 per cent since it hit a record high of 4,486 ringgit a ton on March 4.

Traders said buying in Malaysia’s physical market was dull with only a few deals during the first half of the day. Crude palm oil for March shipment in the southern region was quoted at 3,780/3,850 ringgit a ton. Trades were done at 3,800 ringgit.

China’s price controls are causing soyaoil shortages in some supermarkets, traders said on Wednesday as futures fell on expectations the government might release more reserves to meet demand.

China imported 2.02 million tons of soybeans in February, down 41 per cent from January, official Customs figures showed on Monday. —Reuters