Palm oil prices fell on Tuesday as crude oil and rival vegetable oils declined

Malaysian palm oil futures closed lower on July 21, tracking losses in rival vegetable oils on the Dalian exchange and weaker crude oil prices. The benchmark October contract on the Bursa Malaysia Derivatives Exchange fell by 34 ringgit, or 0.73%, to 4,609 ringgit ($1,127.72) per ton.

According to traders, the market opened under pressure from weaker Asian oilseed markets but managed to remain above the key psychological support level of 4,600 ringgit per ton. On the Dalian exchange, the most-active soyoil contract declined by 0.55%, while palm oil futures lost 1%. CBOT soyoil futures also edged down by 0.07%.

Additional pressure came from a decline of more than 1% in crude oil prices. Markets weighed reports of diplomatic efforts to ease tensions between the United States and Iran while also reacting to fresh attacks and threats by Yemen’s Houthis to blockade shipping near Saudi Arabia. Lower crude oil prices reduce the attractiveness of palm oil as a biodiesel feedstock.

Malaysia’s palm oil export outlook remains mixed. According to AmSpec Agri Malaysia, exports of palm oil products during July 1–20 fell by 0.9% compared to the same period of the previous month. However, Intertek Testing Services estimated exports were up 4.1%, highlighting differences in assessment methodologies.

Weather conditions also remain a key risk factor for the market. Malaysia’s meteorological department expects the country to experience record-high temperatures next year as the El Niño weather pattern strengthens. This has raised concerns over lower palm oil production and could provide support to prices in the medium term.

Tags: prices, palm oil