KUALA LUMPUR: Malaysian palm oil futures slipped on Thursday, snapping a four-session rally, as profit-taking weighed down the market following U.S President Donald Trump’s reciprocal tariffs on trade partners.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 27 ringgit, or 0.6%, to 4,490 ringgit ($1,011.26) a metric ton at the close.
Crude palm oil futures declined as Trump’s fresh tariffs triggered profit-taking, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
However, Paramalingam anticipates prices will remain relatively resilient in the second quarter of the year as demand picks up in April and May alongside increasing production, which is expected to maintain positive market sentiment.
Dalian’s most-active soyoil contract fell 1.18%, while its palm oil contract shed 0.71%. Soyoil prices on the Chicago Board of Trade (CBOT) fell 2.16%.
Palm oil tracks the prices of rival edible oils as it competes for a share of the global vegetable oils market.
Palm climbs on firmer Chicago soyoil, crude oil prices
Oil prices fell by over 3% after U.S. President Donald Trump announced sweeping new tariffs which investors worry will enflame a global trade war that will curtail economic growth and limit fuel demand.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Trump unveiled a 10% minimum tariff on most goods imported to the U.S., with much higher duties on products from dozens of countries, kicking into high gear a global trade war that threatens to stoke inflation and stall growth.
The ringgit, palm’s currency of trade, strengthened 0.25% against the U.S. dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
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