Malaysian palm oil futures ended lower on Tuesday

Malaysian palm oil futures closed lower for the second consecutive day on Tuesday, erasing intraday gains as weaker oil prices weighed on the market.

The benchmark June delivery palm oil contract FCPO1 on the Bursa Malaysia Derivatives Exchange fell 45 ringgit, or 0.94%, to close at 4,766 ringgit (US$1,183.22) per metric tonne.

The market remains vulnerable to oil price movements amid ongoing uncertainty over the geopolitical situation in the Middle East, said Paramalingam Supramaniam, director of Pelindung Bestari, a brokerage firm based in Selangor.

At 10:10 GMT, benchmark Brent crude oil fell 0.75% to $111.93 per barrel. Weaker oil futures make palm oil a less attractive biodiesel feedstock option.

“If exports continue on the same path as in March and existing inventories remain stable, the market is expected to remain resilient,” Supramaniam said.

According to a Reuters poll, Malaysian palm oil inventories likely fell by the most in three years in March, reaching their lowest level since July last year, as a sharp rise in exports more than offset a modest increase in production.

The Malaysian Palm Oil Council is expected to release its supply and demand report on April 10.

The most actively traded Dalian soybean oil contract rose 0.85%, while the palm oil contract fell 0.36%. Soybean oil prices on the Chicago Mercantile Exchange rose 0.11%.

Palm oil prices follow the price movements of competing edible oils as they compete for share in the global vegetable oil market.

Tags: prices, palm oil