VEGOILS - Palm oil falls due to sluggish demands; gains in Dalian competitor oils cap losses

Malaysian palm futures declined on Wednesday due to a lack of demand in key markets. However, gains in Dalian soybean oil helped limit losses.

At the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for October delivery fell 23 ringgit (or 0.54%) to 4,267 Ringgit ($1,009.46). The contract increased by 2.46% on Monday.

Anilkumar bagani, the research head at Mumbai-based Sunvin Group, said that "destination demand is fragmented right now, which could lead to further downward pressure in palm oil prices moving forward."

A bullish momentum is being created in Dalian oil and soy due to the slower crushing, which helps offset some of the bearish sentiments. This prevents a bigger decline.

Dalian's palm oil contract, which is the most active contract, increased by 0.27%. Chicago Board of Trade soyoil prices rose 0.8%.

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

Oil prices rose, recovering from a five week low the day before, as traders focused their attention on U.S. president Donald Trump's threat to increase tariffs against India over its Russian crude purchase and an unexpectedly large U.S. crude withdrawal.

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

The palm ringgit's trade currency, the dollar, has weakened by 0.05%, making it slightly cheaper for foreign buyers.

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)