Prices for palm oil ended trading lower on Wednesday

Palm oil prices closed lower, erasing earlier gains. The decline came amid falling crude and soybean oil prices, according to David Ng, a trader at Iceberg X in Kuala Lumpur. Ng believes prices could find support above 4,480 ringgit per tonne and face resistance at 4,600 ringgit per tonne.

Malaysian palm oil futures closed down more than 1% for the second day in a row on Wednesday, as weaker prices for competing vegetable oils and crude oil, as well as concerns about April export demand, weighed on sentiment.

The benchmark FCPO1 palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 49 ringgit, or 1.07%, to close at 4,532 ringgit (US$1,158.19) per metric tonne.

Oil and palm oil futures are under selling pressure in the Chicago and Dalian crude and soybean oil markets, and growing concerns about April demand are adding to this pressure, said Paramalingam Supramaniam, director of Selangor-based brokerage Pelindung Bestari.

“Freight costs have risen exponentially, leading to lower demand and a buildup of refined oil in storage tanks,” he said.

The most-active soybean oil contract in Dalian fell 0.93%, while the palm oil contract fell 2.14%. Soybean oil prices on the Chicago Mercantile Exchange fell 0.79%.

Palm oil prices are tracking the price of competing edible oils as they compete for share in the global vegetable oil market.

Oil prices fell after Iraq resumed crude oil exports via pipeline to the Turkish Mediterranean port of Ceyhan, raising hopes for some relief amid supply disruptions from Gulf producers.

Weaker crude oil futures are making palm oil less attractive as a feedstock for biodiesel production.

The ringgit strengthened 0.18% against the dollar, making the commodity more expensive for buyers holding foreign currency.

Global vegetable oil markets are acting unpredictably as energy supply disruptions due to the war in the Middle East are raising hopes for a rise in biodiesel demand, although muted demand from major importers is clouding the price outlook, industry veteran Dorab Mistry said.

Tags: prices, palm oil