Palmettos end higher despite the uncertainty surrounding US trade deals which kept the market volatile

The price of Malaysian palm oils futures rose on Tuesday, despite the fact that the market was volatile due to uncertainty about potential trade agreements between major Asian nations and the United States.

At the close, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery gained 38 ringgit (0.9%), to 4,263 Ringgit ($1,008.04) per metric ton. The contract fell by about 2.1% Monday.

Anilkumar bagani, the research head at Mumbai-based Sunvin Group, said that crude palm oil futures had risen overnight following strength in Chicago soyoil and South American futures.

Bagani says that the market's volatility is fueled by the fact that there has been no confirmation of any deals between the U.S.A. and other major Asian countries apart from Indonesia.

He said that the weakness in Chicago soyoil, and rapeseed oils, coupled with a stronger Malaysian Ringgit, had capped gains.

Dalian's palm oil contract, which is the most active contract, fell by 0.36%. Chicago Board of Trade soyoil prices were down by 0.66%.

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

Oil prices fell for the third session in a row on fears that the trade war that is brewing between the United States, and the European Union will reduce economic activity, thereby reducing fuel demand.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

The palm ringgit's trade currency strengthened by 0.09% versus the dollar. This made the commodity slightly cheaper for buyers who hold foreign currencies.

(source: Reuters)