KUALA LUMPUR (Aug 2): Malaysian palm oil futures fell on Thursday evening, snapping three previous days of gains, tracking losses in soyoil and on the back of trade war concerns.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 1% at 2,191 ringgit (US$537.80) a tonne at the end of the trading day.
Trading volume stood at 49,614 lots of 25 tonnes each at the close of trade.
"The market is concerned that U.S. soyoil will fall more tonight, since Trump plans to propose a 25 percent tariff on US$200 billion in Chinese imports, instead of a 10 percent tariff," said a Kuala Lumpur based trader.
Another trader added that the market was already down, tracking losses in soyoil on the U.S. Chicago Board of Trade.
President Donald Trump's administration had initially announced it would seek to impose a tariff of 10% on US$200 billion of Chinese imports, and raising the level to 25% would escalate the dispute over trade between the world's two biggest economies.
The Chicago December soybean oil contract had declined 1.2% on Wednesday, and was last down 0.7%.
Palm oil prices are influenced by the performance of other edible oils, as they compete for a share in the global vegetable oils market.
Palm oil had earlier hit a three week high of 2,233 ringgit, its highest levels since July 11, supported by a weaker ringgit and a revision of biodiesel rules in Indonesia. A weaker ringgit usually supports palm by making it cheaper for holders of foreign currencies.
Indonesia on Wednesday evening said it aims to make the use of biodiesel compulsory for all vehicles and heavy machinery from Sept 1, to cut down on diesel imports and reduce the country's current account deficit.
Palm, soy and crude oil prices at 1214 GMT
|MY PALM OIL||AUG8||2150||-4.00||2150||2150||6|
|MY PALM OIL||SEP8||2170||-20.00||2169||2211||1925|
|MY PALM OIL||OCT8||2193||-21.00||2189||2233||21140|
|CHINA PALM OLEIN||JAN9||0||+0.00||0||0||0|
|CBOT SOY OIL||DEC8||28.76||-0.06||28.7||29.1||8273|
|INDIA PALM OIL||AUG8||592.00||-5.30||590.40||598.3||1196|
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
(US$1 = 4.0740 ringgit)
(US$1 = 68.6800 Indian rupees)
(US$1 = 6.8410 Chinese yuan)