Mixed oils and geopolitical tensions weigh on the palm oil price

The price of Malaysian palm oil futures was a little tighter on Tuesday after the long Eid holiday break.

By midday, the benchmark palm oil contract on the Bursa Derivatives exchange traded between 4,565 and 4,597 Ringgit per ton. It then settled 0.63% lower ($1,161.18) at 4,582 Ringgit.

A trader based in Kuala Lumpur said that mixed price movements between Dalian palm oil and Chicago soybean oils kept palm futures within a tight range. The trader said, "Geopolitical uncertainties also kept?market players on the sidelines after U.S. president Donald Trump claimed that U.S.-Iran had a productive conversation' while Tehran denied any negotiations took place."

Dalian's soyoil most active contract dropped 0.28% while palm oil contracts fell 0.81%. Chicago Board of Trade soyoil prices rose by 0.78%.

As palm oil competes for a share of the global vegetable oil market, it tracks the 'price movements' of its rival edible oils. Prices of oil rose due to supply concerns, as the Middle East conflict showed no signs of ending.

Palm oil is a better option as a feedstock for biodiesel due to the stronger crude oil futures.

The palm ringgit's?currency of trade?, the dollar, has weakened by 0.2%, resulting in a slight price drop for foreign currency buyers.

(source: Reuters)