KUALA LUMPUR: Malaysian palm oil futures edged down on Friday, holding steady amid bearish trade sentiment after US President Donald Trump’s fresh tariff threat against China.
Trump said on Thursday he would impose a 10% tariff on $300 billion of Chinese imports from Sept. 1 and could raise tariffs further if China’s President Xi Jinping fails to move more quickly to strike a trade deal.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was last down 0.1% at 2,062 ringgit ($496.27) per tonne at the close of trade, in a second session of losses.
Palm oil is down 0.2% on the week, snapping two previous weeks of gains.
The vegetable oil may test support at 2,038 ringgit per tonne, with a good chance of breaking this level and falling to 1,991 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Kuala Lumpur-based traders say bearish market sentiment around the additional US-China trade tariff is weighing on palm, but a weaker ringgit could limit losses.
Depreciation in the ringgit, in which palm is priced, usually supports the edible oil by making it cheaper for foreign buyers.
The ringgit, currently trading at over one-month lows, was last down 0.3% against the dollar at 4.1550.
In other related oils, US soyoil futures on the CBOT had fallen 0.3% on Thursday, but were up 0.3% as of 1100 GMT on Friday.
US soybean futures edged higher on Friday, though the oilseed was poised to record its biggest weekly loss in three months amid an escalation in a year-long trade dispute between Washington and Beijing.
Meanwhile, the September soyoil contract on the Dalian exchange rose 0.5% and the Dalian September palm oil contract gained 1.1%.
Palm oil prices are affected by movements in related oils that compete in the global vegetable oils market.