Palm oil prices fell on Monday amid falling crude prices

Palm oil prices have fallen amid falling oil prices, says David Ng, a Kuala Lumpur-based trader at Iceberg X. Expectations of weaker palm oil demand in the coming weeks are also weighing on prices, he adds. Ng sees support at 4,400 ringgit per tonne and resistance at 4,580 ringgit per tonne.

Malaysian palm oil futures closed lower on Monday, reflecting weakness in competing edible oils in the Dalian market, as well as lower oil prices and worsening export performance.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange lost 14 ringgit, or 0.31%, to 4,472 ringgit (US$1,131.87) per metric tonne at the close.

According to independent inspection company AmSpec Agri Malaysia, Malaysian palm oil exports from May 1 to 25 fell 18.0% year-on-year, while Intertek Testing Services reported a 14.5% decline.

The most active Dalian soybean oil contract fell 0.87%, while the palm oil contract lost 0.18%. Trading on the Chicago Mercantile Exchange is closed for a holiday.

Palm oil prices are tracking the price movements of competing edible oils as it battles for share in the global vegetable oil market.

On Monday, oil prices fell more than 4% to two-week lows amid growing optimism that the US and Iran are moving closer to a peace deal, despite persistent disagreements on key issues such as the blockade of the Strait of Hormuz.

Falling crude oil futures prices are making palm oil a less attractive biodiesel feedstock option.

According to data released Monday by the Indonesian Palm Oil Association (GAPKI), Indonesia exported 2.17 million metric tons of palm oil in March, down from 2.88 million metric tons in the same month last year.

Prices for freshly grown FFB palm oil in Indonesia fell sharply at the farmer level following the announcement of a new plan to channel palm oil exports through a state-owned company.

The ringgit, the palm oil market currency, strengthened 0.38% against the US dollar, making the commodity more expensive for buyers holding foreign currency.

Tags: palm oil, prices