JAKARTA: Malaysian palm oil futures closed slightly lower on Thursday, tracking crude oil prices and rival Dalian and Chicago vegetable oils lower.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 1 ringgit, or 0.02 percent, at 4,573 ringgit (USD1,111.30) a metric ton at the close.
“Futures are tracking weakness in crude oil, soyoil and the Dalian market today,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract fell 0.3 percent, while its palm oil contract declined 0.68 percent. Soyoil prices on the Chicago Board of Trade were down 1.98 percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Crude oil prices fell 2 percent on Thursday to their lowest since the first trading day of the Iran war, as a US-Iran interim deal to end the war, reopen the Strait of Hormuz and ease sanctions on Tehran boosted the global supply outlook.
Lower crude oil futures make palm a less attractive option for biodiesel feedstock.
Indonesia is on track to launch its B50 biodiesel mandate - blending 50 percent palm oil-based biodiesel with 50 percent conventional diesel - on July 1, energy minister Bahlil Lahadalia said on Thursday, after fuel tests showed positive results.
The ringgit, palm’s currency of trade, weakened 1.23 percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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