Malaysian palm oil price eases on trade war worries, ringgit strength

  • palm oil
  • Wednesday, 08 May 2019

KUALA LUMPUR: Malaysian palm oil futures fell on Wednesday, pressured by concerns over the Sino-U.S. 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.

The ringgit, which has had seven straight days of losses, rose slightly against the dollar on Wednesday before ending the trading day flat at 4.1470.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was last down 0.2 percent at 2,037 ringgit ($491.20) a tonne at the close of trade.

It earlier climbed to a four-day high of 2,058 ringgit before falling as much as 1.4 percent to an intraday low of 2,012 ringgit.

Palm prices had risen nearly 3 percent 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 said the market was also uncertain over the U.S.-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 U.S. president Donald Trump threatened to impose additional tariffs on Chinese imports.

In other related oils, the Chicago July soybean oil contract fell 0.3 percent, while the May soyoil contract on the Dalian Commodity Exchange gained 0.04 percent.

Meanwhile, the Dalian May palm oil contract slipped 0.6 percent.

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

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