Palm opens lower on weaker rival edible oils, crude prices

Malaysian palm oil futures inched lower on Tuesday for a second consecutive session, weighed down by weaker rival edible oils and crude oil prices.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid RM15, or 0.38 per cent, to RM3,950 a metric ton in early trade.

Dalian’s most-active soyoil contract fell 0.33 per cent, while its palm oil contract shed 1.28 per cent. Soyoil prices on the Chicago Board of Trade were down 0.61 per cent.

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

Crude oil prices fell in early Asian trading as investors lowered their demand growth expectations due to the ongoing trade war between the United States and China, the world’s two biggest economies.

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

The ringgit, palm’s currency of trade, strengthened 0.69 per cent against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Stocks moved sideways while the dollar headed towards its largest monthly fall for years as investors braced for the trade war to be felt in earnings and economic data.

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