Palm oil falls on weaker Dalian crude oil amid Mideast uncertainties
Malaysian palm oil futures dropped more than 1% Wednesday due to lower crude oil prices, declines in Dalian oils, and uncertainty about prospects of a easing in tensions in the Middle East.
By midday, the benchmark palm oil contract on Bursa Derivatives exchange for June delivery was down 63 Ringgit or 1.39% at 4,474 Ringgit ($1,132.37).
The palm market was affected by the decline in crude oil and Dalian, according to Paramalingam Supramaniam of Selangor brokerage Pelindung Bestari.
Supramaniam said, "Everything depends on crude oil prices and ongoing discussions surrounding the negotiations to end the conflict between Iran and?U.S.
Prices of oil fell by around 4% after news that the U.S. had sent Iran a plan in 15 points to end their war.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
Industry officials said that a weakening demand for palm, soy, and sunflower oils in India has also affected prices. They are betting on the price rises resulting from the Iran War not lasting.
Dalian's palm oil contract fell by 1.63%, while the most active soyoil contract dropped by 0.84%. Chicago Board of Trade soyoil prices were down by 0.56%.
As palm oil competes to gain a share of the global vegetable oil market, it tracks the price changes of rival edible oils.
Later in the day, cargo surveyors will release their estimates for exports of 'Malaysian Palm Oil Products' from March 1-25.
The ringgit (the currency used to trade palms) strengthened by 0.05% versus the dollar. This made the commodity slightly less expensive for buyers who hold foreign currencies.
(source: Reuters)
