Palm falls on weaker rival oils and crude, lower export data

JAKARTA: Malaysian palm oil futures closed lower on Monday, tracking weakness in rival edible oils on the Dalian market while crude oil prices and lower export data also weighed on sentiment.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange lost 14 ringgit, or 0.31%, to 4,472 ringgit ($1,131.87) a metric ton at the close.

According to independent inspection company AmSpec Agri Malaysia, exports of Malaysian palm oil products for May 1 to 25 fell 18.0% compared to April 1 to 25, while according to Intertek Testing Services, they fell 14.5%.

Dalian’s most-active soyoil contract fell 0.87%, while its palm oil contract shed 0.18%. Trading at the Chicago Board of Trade is closed for a holiday.

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

Oil prices fell more than 4% to two-week lows on Monday as optimism grew that the United States and Iran were moving closer to a peace deal, even though they remain at odds over key issues such as blockades on the Strait of Hormuz.

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

Indonesia exported 2.17 million metric tons of palm oil products in March, data from the Indonesian Palm oil Association, GAPKI, showed on Monday, down from 2.88 million metric tons in the same month last year.

Indonesian palm oil fresh fruit bunch (FFB) prices have collapsed at the farmers’ level following the announcement of a new plan to channel commodity exports through a central government-run firm.

The ringgit, palm’s currency of trade, strengthened 0.38% against the U.S. dollar, making the commodity more expensive for buyers holding foreign currencies.