Price of palm oil fell by 3%

Palm oil prices fell sharply after prices for competing oil products weakened following US President Trump’s announcement that the conflict in Iran might be over, reducing risk premiums across the oil market, Kenanga Futures analysts noted in a note. The prospect of profit-taking following the recent price rise could also curb buying interest, they added. Kenanga Futures sees support for the May futures contract at 4,340 ringgit per tonne and resistance at 4,600 ringgit per tonne, respectively.

Malaysian palm oil futures fell more than 3% on Tuesday, following declines in prices for competing edible oils in the Dalian and Chicago markets, as well as crude oil, after posting their biggest jump in three years the previous day.

The benchmark palm oil contract FCPO1 for May delivery on the Bursa Malaysia Derivatives Exchange fell 139 ringgit, or 3.04%, to 4,428 ringgit (US$1,129.59) per metric ton at the close of trading, after falling as low as 4,370 ringgit earlier.

“Futures are tracking the price movements of Dalian palm oil, Chicago soybean oil, and WTI crude,” a Kuala Lumpur-based trader said.

According to MPOB data, Malaysian palm oil inventories fell 3.9% in February from the previous month, reaching a four-month low of 2.70 million metric tonnes.

Crude palm oil production fell 18.6% from January to 1.28 million tonnes, while palm oil exports fell 22.5% to 1.13 million tonnes.

The most actively traded Dalian soybean oil contract lost 3.14%, while the palm oil contract declined 1.29%. Soybean oil on the Chicago Mercantile Exchange fell 0.68%.

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

Oil prices fell sharply on Tuesday, 7% after soaring to a more than three-year high in the previous session, as US President Donald Trump predicted a quick end to the Middle East war, easing concerns about prolonged supply disruptions.

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

According to independent inspection company AmSpec Agri Malaysia, Malaysian palm oil exports increased by 45.3% from March 1 to 10 compared to the same period last year (February 1 to 10), while cargo inspection company Intertek Testing Services reported a 37.9% increase.

Tags: prices, palm oil