Palm ends higher despite uncertainty over US trade deals that kept market volatile

KUALA LUMPUR: Malaysian palm oil futures ended higher on Tuesday, although uncertainty over potential trade deals between major Asian countries and the United States kept the market volatile.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 38 ringgit, or 0.9%, to 4,263 ringgit ($1,008.04) a metric ton at the close. The contract lost about 2.1% on Monday.

Crude palm oil futures were higher following overnight strength in Chicago and South American soyoil futures, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.

However, Bagani said the lack of confirmation regarding any trade deals between the U.S. and major Asian countries, apart from Indonesia, continues to fuel market volatility.

“The weakness seen in Chicago soyoil and rapeseed oil, combined with a stronger Malaysian ringgit, capped the gains,” he said.

Dalian’s most-active soyoil contract fell 0.59%, while its palm oil contract shed 0.36%. Soyoil prices on the Chicago Board of Trade were down 0.66%.

Palm oil makes more than 3% weekly gain for highest close in 14 weeks

Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Oil prices declined for a third consecutive session on concerns that the brewing trade war between major crude consumers, the United States and the European Union, will curb fuel demand growth by reducing economic activity.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.09% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.