VEGOILS-Palm oil drops as supply concerns ease on exemption from shutdown

KUALA LUMPUR, March 19 (Reuters) - Malaysian palm oil futures dropped on Thursday as harvesting resumed in world's second-largest palm producer after plantations were exempted from a shutdown imposed to prevent the coronavirus' spread.

The benchmark palm oil contract, for June delivery, on the Bursa Malaysia Derivatives Exchange slid 42 ringgit, or 1.88%, to 2,197 ringgit ($500.34) in early trade.

Palm gained as much as 5.4% in the previous session on fears that Malaysia's move to restrict movement until March 31 would halt harvesting and disrupt supply.


FUNDAMENTALS

* Malaysia on Wednesday exempted palm plantations from the restricted movement order requiring most businesses to shut down, alleviating fears of a disruption in supply of the tropical oil to global markets.

* The market was worried about global demand for the edible oil as the fast-spreading virus has now infected more than 212,000 people and caused 8,700 deaths in 164 nations, triggering emergency lockdowns and raising fears of a global recession.

* Dalian's most-active soyoil contract dropped 1.71%, while its palm oil contract fell 3.86%. Soyoil prices on the Chicago Board of Trade were trading down 0.56%.

* 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 retest a support at 2,184 ringgit per tonne, a break below which could cause a fall to 2,100 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS

* The dollar surged, bonds plunged and global markets struggled to find their footing on Thursday as the European Central Bank's latest promise of stimulus provided only brief solace while the world struggles to contain the pandemic.


* Oil prices surged as much as nearly 20% on Thursday, bouncing back from days of heavy losses in a relief rally that may yet be short-lived, analysts warned, but which was stoked by economic stimulus efforts to ward off a global coronavirus recession.


DATA/EVENTS

0030 Australia Employment Feb

0030 Australia Unemployment Rate Feb

1230 US Initial Jobless Claims Weekly

1230 US Philly Fed Business Indx March ($1 = 4.3910 ringgit)

(Reporting by Mei Mei Chu; Editing by Aditya Soni)