JAKARTA: Malaysian palm oil futures fell on Tuesday, tracking weakness in rival Dalian vegetable oils and softer crude oil prices.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange dropped 34 ringgit, or 0.73 percent, to 4,609 ringgit (USD1,127.72) a metric ton at close.
“Today’s palm market opened lower, following the weakness seen in rival oilseeds during Asia trading hours. The benchmark traded within a narrow range while still managing to hold above the key psychological support level of 4,600 ringgit,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract lost 0.55 percent, while its palm oil contract fell 1 percent. Soyoil prices on the Chicago Board of Trade eased 0.07 percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oil market. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Crude oil prices lost more than 1 percent on Tuesday as markets weighed reports of mediation efforts between the US and Iran against an exchange of fresh attacks between the two and threats of a naval blockade of Saudi Arabia by Yemen’s Houthis.
Exports of Malaysian palm oil products for the July 1-20 period fell 0.9 percent from a month earlier, AmSpec Agri Malaysia said on Monday. According to Intertek Testing Services, exports rose 4.1 percent.
Malaysia is expected to see record-high temperatures next year as El Niño strengthens, its meteorological department told Reuters, stoking worries about lower palm oil production.
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