Palm slips due to weaker Dalian oil; Indian imports increase limit fall

The Malaysian palm futures continued to decline for a second consecutive session on Tuesday. Pressured by Dalian Oils, whose prices were lower, an increase in India’s palm oil imports helped limit the loss.

At the close, the benchmark contract for palm oil delivery in May on the Bursa Derivatives Exchange fell 11 ringgit or 0.24% to 4,488 Ringgit ($1,017.69).

David Ng is a proprietary trader with Kuala Lumpur's Iceberg X Sdn. Bhd. He said that the market was down because of soybean oil's overnight drop and Dalian’s weakness. These factors were mainly influenced by U.S. tariffs and China tariffs.

Dalian's palm oil contract, which is the most active contract, fell by 2.42% while soyoil prices dropped by 1.92%. Chicago Board of Trade soyoil prices were up by 0.73%.

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

The Solvent Extractors' Association of India reported that India's imports of palm oil in February increased 35.7% compared to January, reaching 373,549 tons.

The oil prices recovered from earlier losses, aided by the weakness of the U.S. Dollar. However, gains were limited as fears about a possible U.S. economic recession and tariffs' impact on global growth increased.

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

The palm ringgit's trade currency strengthened by 0.25% versus the dollar. This made the commodity more costly for buyers who hold foreign currencies.

Exports of palm oil products from Malaysia between March 1-10 were estimated to have fallen by 25.8% to 38.3% compared to the same period one month earlier.

Indonesian prosecutors have handed over illegal palm oil plantations that were seized in an ongoing corruption investigation to a state-owned firm which will manage the land. ($1 = 4.4100 ringgit)

(source: Reuters)