Palm oil trades lower than rival oils amid fears of tariff wars

Malaysian palm futures continued to lose on Wednesday. They erased last session's gains. This was due to the competition from edible oils traded in Dalian and Chicago, and the growing economic anxiety over tariff wars.

By midday, the benchmark June palm-oil contract traded on Bursa Malaysia's Derivatives exchange fell 100 ringgit or 2.39% to 4,088 Ringgit ($909.66).

"Price movement is currently driven by the market sentiment and broader concerns, especially around the ongoing tariff battles," said Darren Lim. Commodities strategist at Singapore-based Phillip Nova.

As the markets struggle with uncertainty, the palm oil sector has been caught up in a downward trend.

Dalian's palm oil contract, which is the most active contract, fell 2.1% while soyoil prices dropped 1.28%. Chicago Board of Trade Soyoil Prices fell 1.78%.

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

Finance Minister Sri Mulyani said that Indonesia would adjust its crude palm export tax in order to reduce the burden on exporters of U.S. Tariffs,

The oil price fell to its lowest level in four years on Wednesday, in the worst five-day loss streak in three year. Several commodities, such as base metals, also tumbled, as the trade conflict between China and the U.S. intensifies.

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

The palm ringgit's currency, the U.S. Dollar, fell by 0.11%, lowering the price of the commodity for foreign buyers.

(source: Reuters)