Palm oil prices fall on a stronger ringgit and weaker competitors

The price of palm oil in Malaysia fell for the second session in a row on Tuesday as the stronger ringgit weighed down on sentiment, along with weaker vegetable oils.

At the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for July delivery fell 25 ringgit (0.63%) to 3,940 Ringgit ($910.98) per metric ton.

A Kuala Lumpur based trader reported that palm has continued to fall as a stronger ringgit encouraged heavy selling activity in the market.

Palm's trade currency, the ringgit, has strengthened by 0.8% against the US dollar, increasing the price of the commodity for buyers who hold foreign currencies.

Dalian's palm oil contract, which is the most active contract, fell by 1.72%. Chicago Board of Trade soyoil prices were down by 1.13%.

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

The price of crude oil fell because investors reduced their expectations for demand growth due to the trade conflict between the United States, China and the other two largest economies in the world.

Palm oil is less appealing as a biodiesel source due to weaker crude oil futures. ($1 = 4.3250 ringgit)

(source: Reuters)