Palm slips due to weak Chicago soyoil and sluggish demands

Malaysian palm futures fell on Wednesday due to lower Chicago soyoil and weaker demand from key markets. However, gains in Dalian soybean oil helped limit losses.

At midday, the benchmark palm oil contract on Bursa Derivatives exchange for October delivery fell 41 ringgit (0.96%) to 4,249 Ringgit ($1,005.68) per metric ton. The contract increased by 2.46% on Monday.

Anilkumar bagani, research director of Mumbai-based vegetable oils broker Sunvin Group, said that the price of crude palm oil futures fell overnight due to weakness in Chicago soyoil.

Bagani said that the current fragmentation of destination demand could lead to further downward pressures on palm oil prices in the future.

He added that a bullish trend in Dalian oil and rapeseed helped to offset some bearish sentiments.

On August 11, the MPOB will release its July data on supply and demand.

Dalian's soyoil contract with the highest volume increased by 1.4% while palm oil contracts increased by 0.4%. Chicago Board of Trade soyoil prices were down by 0.09%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

The oil price rose, recovering from the five-week low it had hit the day before, amid fears of disruptions in supply after U.S. president Donald Trump threatened to impose tariffs on India for its purchases of Russian crude.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit, the currency of trade for palm, has remained unchanged in relation to the U.S. dollar.

Data from the European Commission showed that by the third week of August, the imports of soybeans into the European Union for the 2025/26 crop season which began in July were at 0.97 million tons. This was a 26% decrease compared to the same period one year ago. Palm oil imports fell 56% to 0.16 million metric tons.

(source: Reuters)