Palm reverses gains on trade war concerns, ringgit strength

-A +A

KUALA LUMPUR (May 8): Malaysian palm oil futures surrendered gains to fall on Wednesday amid concerns over Sino-US trade conflict and as the ringgit strengthened.

A stronger ringgit, palm's currency of trade, usually makes the edible oil more expensive for foreign buyers. It rose 0.02% against the dollar to 4.1460 on Wednesday, after previously seeing seven straight days of losses.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was last down 0.1% at RM2,038 (US$491.56) a tonne around noon, after earlier climbing to a four-day high of RM2,058.     

Palm prices had risen nearly 3% in its previous session tracking gains in related edible oils.

"The market started strong on supportive external oils, but the ringgit strengthened along with some profit-taking which weighed on the market," said a Kuala Lumpur-based futures trader.

She added that the market was also uncertain over the US-China trade talks that are scheduled to start on Thursday when China's vice premier visits Washington.

Global stocks and commodities markets were hit earlier this week after US president Donald Trump threatened to impose additional tariffs on Chinese imports.  

In other related oils, the Chicago July soybean oil contract rose 0.2%, while the May soyoil contract on the Dalian Commodity Exchange gained 1%.

Meanwhile, the Dalian May palm oil contract slipped 0.1%.

Palm oil prices are affected by movements in soyoil, with which it competes for global market share.

Palm, soy and crude oil prices at 0455 GMT

Contract          Month    Last  Change     Low   High  Volume
MY PALM OIL       MAY9        0   +0.00 0 0 0
MY PALM OIL       JUN9     2010   -4.00    2009   2030     523
MY PALM OIL       JUL9     2038   -2.00    2032   2058    6844
CHINA PALM OLEIN  MAY9     4180   -6.00    4174   4228     354
CHINA SOYOIL      MAY9     5286  +50.00    5238   5400     306
CBOT SOY OIL      MAY9    26.81   +0.00       0 350
INDIA PALM OIL    MAY9   518.00   -0.40  518.00  520.1     160
INDIA SOYOIL      MAY9   737.35   +1.50  733.55  739.1    1420

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel

(US$1 = RM4.1460)
(US$1 = 69.6090 Indian rupees)
(US$1 = 6.7702 Chinese yuan)