KUALA LUMPUR: Malaysian palm oil futures fell on Thursday, pressured by weaker soyoil prices, while likely trade talks between the United States and China were also in focus.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 40 ringgit, or 0.89percent, to 4,448 ringgit (USD1,057.79) a metric ton at the close. The contract rose 0.4 percent in the previous session.
The market traded lower due to the continuous decline in soyoil prices, as traders closely monitor the upcoming Sino-US trade talks to determine whether China will increase its soybean purchases from the US, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari.
Senior Chinese trade negotiator Li Chenggang is expected to travel to Washington this week to meet US officials, a United States government spokesperson said earlier this week, with the two superpowers looking to chart a path beyond their current tariff truce.
“Weaker-than-expected production in Malaysia this month, as well as robust export demand, is keeping (palm oil) prices supported,” Supramaniam said. Dalian’s most-active soyoil contract fell 0.55 percent, while its palm oil contract shed 1.09 percent. Soyoil prices on the Chicago Board of Trade were down 0.3percent.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil fell after rising in the previous session, pressured by expectations of lower US fuel demand with the end of the summer travel season and by the restart of Russian supply to Hungary and Slovakia through the Druzhba pipeline.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.43 percent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
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