JAKARTA: Malaysian palm oil futures closed lower on Monday following a decline in rival oils, while weaker Malaysian palm oil exports in February also weighed on sentiment.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange lost 71 ringgit, or 1.56%, to close at 4,483 ringgit ($1,004.26) per metric ton.
“The futures are mirroring sell-off in Chicago’s soyoil futures and in South American markets on Friday night and weakness in Dalian’s palm olein and soyoil futures in Asian hours,” said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.
“The market has also followed the weaker Malaysian palm oil export performance in February.”
Dalian’s most-active soyoil contract rose 0.25%, while its palm oil contract lost 0.46%. Soyoil prices on the Chicago Board of Trade (CBOT) fell 0.14% earlier in the session from Friday’s closing level, but reversed course to close 0.11% higher.
Palm oil is affected by the price movements in related oils as it competes for a share of the global vegetable oils market.
Palm oil trades range-bound, set for monthly gains
Malaysian palm oil products exports in February are estimated to fall 8.5%-11%, according to independent inspection company AmSpec Agri Malaysia and cargo surveyor Intertek Testing Services.
Meanwhile, Indonesia has lowered its crude palm oil reference price to $954.50 per ton in March, a trade ministry official said on Friday, but export tax will remain at $124 a ton.
Oil gained as upbeat manufacturing data from China, the world’s biggest crude importer, led to renewed optimism for fuel demand, although uncertainty about a Ukraine peace deal and global economic growth from potential U.S. tariffs loomed.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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