KUALA LUMPUR: Malaysian palm oil futures declined on Friday, pressured by weaker Chicago soyoil and crude oil prices as U.S. President Donald Trump’s reciprocal tariffs fuelled uncertainty around global trade.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 160 ringgit, or 3.56%, to 4,329 ringgit ($976.32) a metric ton.
The contract fell 2.04% this week, erasing the previous week’s gains.
Crude palm oil futures tracked weaker crude and soybean oil prices due to uncertainty about global trade following Trump’s tariff announcement, a Kuala Lumpur-based trader said.
“Liquidations were heavy last night and have continued through midday today. While the physical market remains strong, futures are trading on a weaker note,” the trader said.
Soyoil prices on the Chicago Board of Trade (CBOT) eased 2.25%. The Dalian Commodity Exchange is closed for the Qingming Festival and will reopen on Monday.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Palm climbs on firmer Chicago soyoil, crude oil prices
Oil prices were heading towards their lowest close since the midst of the coronavirus pandemic in 2021 on Friday, hit by Trump’s barrage of new tariffs and output increases announced by the OPEC+ producer group.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Several countries have threatened to wage a trade war with the U.S. as Trump’s tariffs fed expectations for a global downturn and sharp price hikes for swathes of goods in the world’s biggest consumer market.
The ringgit, palm’s currency of trade, strengthened 0.14% against the U.S. dollar, making the commodity more expensive for buyers holding foreign currencies.
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