Palm oil prices fell on Tuesday

According to David Ng, a Kuala Lumpur-based trader at Iceberg X, the price decline followed a decline in soybean oil and crude oil prices. Ng sees support at 4,500 ringgit per tonne and resistance at 4,680 ringgit per tonne.

Malaysian palm oil futures closed more than 1% lower on Tuesday following the extended Eid al-Fitr holiday weekend, as weakness in competing vegetable oils weighed on the market and the Middle East war prompted traders to remain cautious.

The benchmark June palm oil contract FCPO1 on the Bursa Malaysia Derivatives Exchange fell 72 ringgit, or 1.56%, to 4,539 ringgit (US$1,148.24) per metric tonne at the close.

A Kuala Lumpur trader reported that fluctuations in Dalian palm olein and Chicago soybean oil prices kept palm oil futures in a relatively tight range.

“Geopolitical uncertainty kept market participants on the sidelines after US President Donald Trump said the US and Iran had a ‘productive conversation,’ but Tehran denied any talks took place,” the trader added.

The most actively traded Dalian soybean oil contract fell 0.97%, while the palm oil contract fell 1.79%. Soybean oil prices on the Chicago Mercantile Exchange fell 0.55%.

Palm oil prices follow the price movements of competing edible oils as it fights for share of the global vegetable oil market.

Oil prices rose amid supply concerns as the war in the Middle East showed no signs of ending.

Higher oil futures prices are making palm oil a more attractive feedstock option for biodiesel production.

The ringgit weakened 0.43% against the dollar, making the commodity cheaper for buyers holding foreign currency.

Industry officials said Indian oil refineries are cutting purchases of palm, soybean, and sunflower oils, hoping that the price hike caused by the war in Iran will not last long and that they will be able to replenish stocks after the conflict ends.

Tags: prices, palm oil