Palm oil falls as crude and rival oils slump
Malaysian palm oil futures declined on Tuesday, following rival edible oils in Dalian and Chicago and crude oil prices.
By midday, the benchmark palm oil contract for May delivery at the Bursa Malaysia Derivatives Exchange had fallen 106 ringgit or 2.32% to $4461 ringgit (1,134.83 USD) per metric ton after having dropped to 4,370 rings earlier.
A Kuala Lumpur trader stated that "the futures are tracking the performance of Dalian palm oils, Chicago soy oils and crude oil while waiting for Malaysian Palm Oil Board data". MPOB data published?during midday breaks showed that Malaysia's palm oils stocks dropped 3.9% from the previous months to a 4-month low of 2,70 million metric tonnes.
Palm oil exports dropped 22.5% from 1.13 million tons to?1.13 millions tons.
Dalian's palm oil contract, which is the most active contract, fell by 1.44%. Chicago Board of Trade Soyoil fell 0.5%.
Palm oil follows the price movements of competing edible oils in its competition for a market share on the global vegetable 'oils' market. Oil prices dropped on Tuesday, after reaching a three-year high the previous session. U.S. president Donald Trump said that the Middle East war could end soon. This eased?concerns over prolonged disruptions of global oil supplies.
Palm oil is less appealing as a biodiesel feedstock due to lower crude oil futures. Due to the soaring crude oil prices, Indonesia could revive its plan to introduce a B50 mandatory grade of biodiesel based on palm oil in mid-year. According to Wang Tao, technical analyst, palm oil may bounce back into the range of 4,513-4,546 Ringgit per metric tonne after stabilizing around 4,369 ringgit.
(source: Reuters)
