JAKARTA: Malaysian palm oil futures fell on Monday, tracking rival vegetable oils in both Chicago and Dalian markets, with crude oil prices also weighing on sentiment.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange dropped 25 ringgit or 0.56% at 4,450 ringgit ($1,099.31) a metric ton at the close.
“The futures were seen trading sideways after opening gap lower following a selloff in energy prices, Chicago soyoil and Chinese vegetable oil futures in today’s Asian hours,” Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.
Dalian’s most-active soyoil contract fell 0.29%, while its palm oil contract shed 1.34%. Soyoil prices on the Chicago Board of Trade were down 1.76%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
According to independent inspection company AmSpec Agri Malaysia, exports of Malaysian palm oil products for June 1 – 15 period rose 23.8% while according to cargo surveyor Intertek Testing Services, it rose 9.6%.
Oil prices slipped to a 3-month low on Monday after U.S. President Donald Trump and Iran’s deputy foreign minister said they had reached an initial deal to end the war and to resume traffic through the Strait of Hormuz.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Malaysia has lowered its July crude palm oil reference price to a level that maintains the export duty at 10%, a circular on the Malaysian Palm Oil Board website showed on Monday.
India’s palm oil imports edged up in May, rebounding from a four-month low, but remained below normal levels as refiners increased purchases of cheaper soyoil after palm oil’s price advantage narrowed, a leading industry body said on Friday.
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