JAKARTA: Malaysian palm oil futures closed lower on Monday, paring the previous session’s gains, as weakness in Dalian palm oil and crude oil prices weighed on sentiment.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 24 ringgit, or 0.6%, to 3,987 ringgit ($947.48) a metric ton when the market close.
“The futures is tracking external Dalian palm oil and crude oil performance while waiting for new lead,” a Kuala Lumpur-based trader said.
Dalian’s most active soyoil contract fell 0.22%, while its palm oil contract dropped 0.43%. Soyoil prices on the Chicago Board of Trade (CBOT) rose 0.61%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices held steady on Monday as Middle East risks eased, while a possible OPEC+ output increase in August and uncertainty over the global demand outlook weighed on the market.
Palm rises on expectations of lower output, strong demand
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Exports of Malaysian palm oil products for June rose 4.3% compared to May, according to independent inspection company AmSpec Agri Malaysia, while according to ITS it rose 4.7%.
Malaysia has lowered its July crude palm oil reference price, a change that reduces the export duty to 8.5% from 9.5% in June, a circular on the Malaysian Palm Oil Board website showed.
The ringgit, palm’s currency of trade, strengthened 0.38% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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