Palm slides more than 1% on weaker rival oils, geopolitical tensions

KUALA LUMPUR: Malaysian palm oil futures ended more than 1%lower on Tuesday after a long Eid holiday break, asweaker rival edible oils weighed on the market and the Middle East war kept traders cautious.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 72 ringgit, or 1.56%, to 4,539 ringgit ($1,148.24) a metric ton at the close.

Price movements in Dalian palm olein and Chicago soybean oil kept palm futures moving within a relatively tight range, a Kuala Lumpur-based trader said.

“Geopolitical uncertainty kept market participants on the sidelines, after U.S. President Donald Trump said that U.S. and Iran had a ‘productive conversation’ but Tehran denied that any negotiations had taken place,” the trader added.

Dalian’s most-active soyoil contract fell 0.97%, while its palm oil contract shed 1.79%. Soyoil prices on the Chicago Board of Trade BOcv1declined 0.55%.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Oil prices rose on supply fears, as the Middle East war showed no signs of ending. O/R

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, weakened 0.43% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Indian vegetable oil refineries are curtailing purchases of palm oil, soyoil and sunflower oil, betting that the Iran war-driven price rally will not last and that they can replenish stocks after the conflict ends, industry officials said.