Palm falls on weak rival oils, stronger crude oil limits decline

Malaysian palm oil futures opened lower on Monday for a second session, tracking weakness in rival edible oils, although stronger crude oil prices capped the fall.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid RM19, or 0.44 per cent, to RM4,254 (US$1,008.30) a metric ton in early trade.

Dalian’s most-active soyoil contract fell 0.42 per cent, while its palm oil contract shed 0.78 per cent. Soyoil prices on the Chicago Board of Trade were down 0.38 per cent.

Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.

Oil prices rose after the US reached a trade deal with the European Union and may extend a tariff pause with China, reducing concerns that potentially higher levies would limit economic activity and impact fuel demand.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Cargo surveyors estimated that exports of Malaysian palm oil products for July 1–25 fell between 9.2 per cent and 15.2 per cent from a month earlier.

The ringgit, palm’s currency of trade, weakened 0.02 per cent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Tags: benchmark contract, soyoil, Malaysia, palm oil, futures