Palm oil prices fall as Trump tariffs cause profit booking

Malaysian palm futures fell on Thursday, ending a four session rally. Profit-taking was a factor in the decline, following President Donald Trump’s tariffs against trade partners.

At the close, the benchmark palm oil contract on the Bursa Derivatives Exchange for June delivery fell 27 ringgit (0.6%), to 4,490 Ringgit ($1,011.26) per metric ton.

Paramalingam Supramaniam of Selangor's brokerage Pelindung Bestari said that the crude palm oil futures fell as Trump's new tariffs caused profit-taking.

Paramalingam expects that prices will remain relatively stable in the second half of the year, as the demand for the product increases in April and may, along with production. This is expected to keep the market in a positive mood.

Dalian's palm oil contract, which is the most active contract, fell by 0.71%. Chicago Board of Trade Soyoil Prices fell by 2.16%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the prices for rival edible oils.

Oil prices dropped by more than 3% following the announcement of new tariffs by U.S. president Donald Trump. Investors are concerned that this will ignite a global war on trade, which will limit economic growth and reduce fuel demand.

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

Trump announced a minimum 10% tariff on goods imported into the U.S. with higher duties for products from dozens countries. This kicked off a global war of trade that could stoke inflation or stall growth.

The palm ringgit's currency has strengthened by 0.25% against U.S. dollars, making it slightly more expensive to buyers who hold foreign currencies. ($1 = 4.4400 ringgit)

(source: Reuters)