Palm prices fall as Trump tariffs lead to profit booking
Malaysian palm futures fell on Thursday after a four session rally. Profit-taking was blamed for the decline, following President Donald Trump’s tariffs against trade partners.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for June delivery fell 56 ringgit or 1.24% to 4,461 Ringgit ($1,000.22).
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 1.12%. Chicago Board of Trade Soyoil Prices fell by 1.48%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the prices for rival edible oils.
After Trump's announcement of tariffs, oil prices fell $2. This stoked fears that a trade war could dampen the demand for crude.
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 halt growth.
Palm's trade currency, the ringgit (U.S. Dollar), has fallen by 0.2%, making it cheaper for foreign buyers.
Technical analyst Wang Tao stated that palm oil is neutral between 4,500 and 4,564 ringgits per ton, but an escape from this range could indicate a new direction.
(source: Reuters)
