Palm tumbles nearly 3% on weak crude, Chicago soyoil

KUALA LUMPUR: Malaysian palm oil futures tumbled close to 3% on Wednesday, as crude oil and Chicago soyoil prices fell, and the ringgit strengthened against the dollar.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid 133 ringgit, or 2.82%, to 4,577 ringgit ($1,176.16) a metric ton at the close.

Oil prices extended declines, slumping to two-week lows after Axios reported that Washington believed it was close to a one-page framework agreement with Iran to end the war.

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

“Crude palm oil prices plunged below 4,600 ringgit as oil prices weighed. The contract’s weakness also coincides with a drop in soybean oil prices as well,” said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

Soyoil prices on the Chicago Board of Trade were down 2.39%.

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

Dalian’s most-active soyoil contract rose 0.78%, while its palm oil contract added 0.37%.

The ringgit, palm’s currency of trade, strengthened 1.01% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

European Union soybean imports for the 2025/26 season, which began in July, had reached 11.1 million metric tons by May 3, down 9% from the same period a year earlier, while palm oil imports were down 4% at 2.4 million tons, European Commission data showed.