Palm Oil Futures Decline Amid Currency and Oil Price Shifts

KUALA LUMPUR: Palm oil futures in Malaysia experienced a second day of losses on Tuesday, influenced by a stronger ringgit and underperforming competitor vegetable oils.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange decreased by 25 ringgit, a 0.63% drop, settling at 3,940 ringgit ($910.98) per metric ton at the session’s close.

A trader in Kuala Lumpur mentioned that the continuous decline in palm oil prices was triggered by the strengthening of the ringgit, which led to substantial selling activity.

The ringgit, the currency used for palm oil transactions, appreciated by 0.8% against the dollar, thereby raising the cost for international buyers.

On the Dalian Commodity Exchange, the most-active soyoil contract decreased by 0.84%, while the palm oil contract fell by 1.72%. Furthermore, soyoil prices on the Chicago Board of Trade registered a decrease of 1.13%.

The price fluctuations of palm oil often mirror those of competing edible oils, given their competition in the global vegetable oils market.

Impact of Crude Oil Prices

Crude oil prices have also declined, influenced by investor concerns regarding demand growth due to the ongoing trade tensions between the United States and China, the world’s leading economies.

Lower crude oil prices diminish palm oil’s appeal as a biodiesel feedstock.