KUALA LUMPUR: Malaysian palm oil futures fell more than 3% on Tuesday as trading resumed after a public holiday, with weakness in rival Dalian contracts and crude oil prices weighing on the market.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed 156 ringgit, or 3.83%, lower at 3,920 ringgit ($834.04) per metric ton, its steepest daily decline since May 31, 2023.
Weakness in Dalian soyoil futures and crude oil prices are putting pressure on Malaysian palm oil futures, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
Dalian’s most-active soyoil contract fell 1.58%, while its palm oil contract lost 1.75%. Soyoil prices on the Chicago Board of Trade were down 0.29%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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Oil prices fell more than $1 on Tuesday, extending losses from a four-month low in the previous session, as investors worried about supply rising later in the year amid signs of weakening U.S. demand.
At 1000 GMT, Brent crude futures were down $1.33, or 1.70%, to $77.03 a barrel.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.09% against the dollar, making the commodity slightly more expensive for buyers holding the foreign currency.
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