Palm oil falls as fears over Trump's tariffs weigh on crude and soyoil

The price of Malaysian palm oil futures fell on Friday due to the weaker Chicago crude oil and soyoil prices. This was a result of President Donald Trump’s reciprocal tariffs, which increased uncertainty in global trade.

The benchmark contract for palm oil delivery in June on Bursa Derivatives Exchange fell 160 ringgit or 3.56% to 4,329 Ringgit ($976.32) per metric ton.

The contract dropped by 2.04%, wiping out the gains of the previous week.

A Kuala Lumpur based trader reported that crude palm oil futures followed the weaker prices of soybean and crude oil due to global uncertainty following Trump's tariff announcement.

"Liquidations have been heavy since last night, and they continue to be so today at midday." The physical market is still strong but futures are on a lower note," said the trader.

Chicago Board of Trade Soyoil Prices dropped by 2.25%. Dalian Commodity Exchange will be closed on Sunday for Qingming Festival. It will reopen Monday.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

The oil prices fell to their lowest level since 2021, when the coronavirus epidemic was at its peak. This was due to Trump's new tariffs as well as the OPEC+ group's announcement of increased production.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

Many countries have threatened a trade conflict with the U.S. Trump's tariffs have fueled expectations of a global recession and steep price increases for large swathes in the world's largest consumer market.

The palm ringgit's currency has strengthened by 0.14% in relation to the U.S. Dollar, increasing the price of the commodity for foreign buyers. ($1 = 4.4340 ringgit)

(source: Reuters)