Palm Oil Futures Decline Amidst Global Economic Concerns

KUALA LUMPUR: Palm oil futures in Malaysia experienced a decline for the sixth consecutive trading day on Monday. This downturn was influenced by weaker soyoil and crude oil prices, a stronger ringgit, and anxieties regarding U.S. tariff policies.

The benchmark palm oil contract, scheduled for July delivery on the Bursa Malaysia Derivatives Exchange, decreased by 64 ringgit, equivalent to 1.61%, settling at 3,911 ringgit ($895.58) per metric ton at the session’s close.

According to David Ng, a proprietary trader at Iceberg X Sdn Bhd, the decline in crude palm oil futures is attributable to the weakness observed in soybean oil and crude oil markets. This reflects overall negative market sentiment arising from U.S. tariff measures.

Ng added, “The appreciation of the ringgit is also contributing to the downward pressure on prices.”

On the Dalian Commodity Exchange, the most-active soyoil contract saw a decrease of 0.13%, while the palm oil contract fell by 1.18%. Conversely, soyoil prices on the Chicago Board of Trade experienced a rise of 0.6%.

The price of palm oil tends to follow the movements of other vegetable oils due to its competition in the global market.

Reports indicate that exports of Malaysian palm oil products saw an increase of between 11.9% and 18.5% during the period of April 1-20, compared to the same period last month.

Oil prices experienced a decline of over 2% amid indications of progress in discussions between the U.S. and Iran. Investor concerns persist regarding the potential economic impact of tariffs, which could lead to reduced fuel demand.

Lower crude oil prices make palm oil a less appealing option for biodiesel feedstock.

The ringgit, the currency in which palm oil is traded, strengthened by 0.98% against the U.S. dollar, making the commodity more expensive for international buyers.