Palm oil's performance is lower due to weakness in Chicago Soyoil

The price of palm oil in Malaysia ended lower Tuesday after a five session winning streak. Chicago soyoil fell as the U.S. announced it would delay implementing tariffs against Mexico and Canada.

At the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for April delivery fell 63 ringgit or 1.44% to 4,304 Ringgit ($969.37).

A Kuala Lumpur based trader stated that the crude palm oil futures fell due to weakness in the Chicago soybean oil market.

The trader stated that "the news that the U.S. would postpone the imposition of import tariffs against Mexico and Canada has caused a large sell-off this morning in Chicago soybean oil."

Chicago Board of Trade soyoil fell by 2.54%. Dalian Commodity Exchange will be reopening on Wednesday after the Chinese Lunar New Year.

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

Five dealers reported that India's palm-oil imports fell to their lowest levels in 14 years in January as refiners substituted the cheaper soyoil with the tropical oil due to negative refining margins.

The U.S. trade tariffs against China have caused a drop of nearly 2% in U.S. crude oil prices. Palm oil is less appealing as a biodiesel feedstock due to weaker crude oil futures.

The palm ringgit's trade currency strengthened by 0.67% against dollars, increasing the price of the commodity for buyers who hold foreign currencies. ($1 = 4.4400 ringgit)

(source: Reuters)