Palm opens lower on weak soyoil, strong ringgit

Malaysian palm oil futures opened lower on Monday, reversing the previous session’s gains, as weaker soyoil prices and a stronger ringgit weighed on the market.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid RM34, or 0.79 per cent, to RM4,281 (US$1,010.62) a metric ton in early trade.

Dalian’s most-active soyoil contract fell 0.34 per cent, while its palm oil contract added 0.29 per cent. Soyoil prices on the Chicago Board of Trade were down 0.47 per cent.

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

The ringgit, palm’s currency of trade, strengthened 0.19 per cent against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Oil prices barely budged as traders eyed the impact of new European sanctions on Russian oil supply, rising output from Middle East producers and concerns about fuel outlook as tariffs weighed on global economic growth.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Cargo surveyor Intertek Testing Services estimated that exports of Malaysian palm oil products for July 1-20 fell 3.5 per cent compared with the same period a month earlier. AmSpec Agri Malaysia’s export estimates are expected later in the day.

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