Palm oil falls due to weaker soyoil and a firmer Ringgit
Malaysian palm futures declined on Monday for a sixth consecutive session as a result of a weaker ringgit, a decline in crude oil, and the weakness of soyoil. Concerns about U.S. trade tariffs also contributed to the drop.
At midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for July delivery fell 46 ringgit or 1.16% to 3,929 Ringgit ($895.80), a metric tonne.
The price of crude palm oil futures fell on the back of lower soybean oil and crude oils, reflecting the global negative sentiment resulting from U.S. tariff policies. David Ng is a proprietary trader with Kuala Lumpur based trading firm Iceberg X Sdn. Bhd.
A stronger ringgit can also be seen as a factor that affects prices.
Dalian's palm oil contract, which is the most active contract, fell 1.4%. Chicago Board of Trade soyoil prices fell 0.12%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
Intertek Testing Services, a cargo surveyor, estimated that exports of palm oil products from Malaysia increased by 11.9% between April 1-20. AmSpec Agri Malaysia will release its estimate later that day.
Oil prices fell by more than 1.5%, as investors focused once again on fears that U.S. trade tariffs will cause economic headwinds and reduce fuel demand.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency strengthened by 0.54% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.
According to a projection, the price of palm oil could continue to fall between 3,875-3 929 ringgits per metric tonne, said technical analyst Wang Tao. ($1 = 4.3860 ringgit)
(source: Reuters)
