Palmetto falls as Dalian's palm oil softens, triggering profit-taking

After three consecutive sessions of gains, the Malaysian palm oil futures ended Thursday?lower, as Dalian's palm oil prices fell, triggering profit-taking.

The benchmark palm oil contract for July delivery on the 'Bursa Malaysia derivatives exchange' lost 49 ringgit or 1.06% to 4,579 Ringgit ($1,155.44).

Anilkumar bagani, head of commodity research at Mumbai-based Sunvin Group, said that the futures traded lower on Wednesday due to profit-taking.

Dalian's palm oil contract, which is the most active soyoil contract, fell by 0.05%. Prices of soyoil on the Chicago Board of Trade fell by 0.2%.

As it competes to gain a share in the global vegetable oil market, palm oil monitors the price movements of its rival edible oils.

Bagani added that Indonesia's B50 allocations would also give an indication of the rise in palm oil use in biofuels.

Indonesia will increase the mandatory biodiesel content of palm oil from 40% to 50% starting July 1. The remaining conventional diesel will be used. The programme is a part of the government’s strategy to reduce its dependency on expensive fuel imports.

The oil price rose more than $1 Thursday due to the stalled?talks of peace between Iran and the United States, and the continued?restrictions of trade through the Strait of Hormuz.

Palm oil is a better option than crude oil for biodiesel because of the stronger crude oil futures.

The palm ringgit's currency of trade has weakened by 0.3% against the US dollar, lowering the price for foreign currency buyers.

(source: Reuters)