KUALA LUMPUR: Malaysian palm oil futures fell for a second straight session on Tuesday, weighed down by weaker rival edible oils amid concerns about the US and Chinese tariff policies.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange slid 59 ringgit, or 1.31%, to 4,440 ringgit ($1,002.71) a metric ton by the midday break.
The market was down due to soybean oil’s overnight fall and Dalian weakness, influenced mainly by U.S and China tariffs as well as weaker crude oil prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Dalian’s most-active soyoil contract fell 1.72%, while its palm oil contract shed 2.64%.
Soyoil prices on the Chicago Board of Trade were down 0.09%. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices fell for a second day on concerns that US tariffs on Canada, Mexico and China would slow economies around the world and hurt energy demand while OPEC+ ramps up its supply. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.16% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Malaysian palm oil slips on profit taking
Cargo surveyors estimated that exports of Malaysian palm oil products during March 1-10 fell between 25.8% and 38.3%, compared with the same period a month earlier.
Indonesian prosecutors handed over more than 221,000 hectares (546,000 acres) of illegal palm oil plantations seized as part of an ongoing corruption probe to a new state-owned company that will manage them.
Palm oil may fall towards 4,360 ringgit per ton, as it failed to break resistance at 4,642 ringgit, Reuters technical analyst Wang Tao said.
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