Malaysian palm oil futures declined on Tuesday, snapping a two-session winning streak, as traders booked profits amid weaker cues from rival edible oils and soft crude oil prices.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell by 52 ringgit, or 1.23%, to 4,178 ringgit ($982.60) per metric ton by the midday break.
A Kuala Lumpur-based trader attributed the pullback to profit-taking, noting the market’s recent gains and softer palm oil prices on China’s Dalian Exchange as a trigger.
Edible Oil Market Snapshot:
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Dalian Exchange:
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Soyoil contract: Flat
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Palm oil contract: Slight gain of 0.02%
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CBOT Soyoil: Down 0.43%
Since palm oil competes with soyoil and sunflower oil in the global vegetable oils market, it often moves in tandem with these commodities.
Crude Oil Impact:
Crude oil prices declined, influenced by U.S. President Donald Trump’s 50-day ultimatum to Russia to end the Ukraine war or face new sanctions. The extended deadline eased immediate supply concerns, pressuring oil and indirectly weighing on palm oil, which is used as biodiesel feedstock.
Currency Factor:
The Malaysian ringgit — the trading currency for palm oil — weakened 0.05% against the U.S. dollar, slightly improving palm oil’s price competitiveness for foreign buyers.
Demand Signals from India:
India’s palm oil imports surged to an 11-month high in June, as refiners capitalized on attractive discounts compared to rival oils and replenished depleted stockpiles. This rise in imports could support future prices if sustained.
Technical Outlook:
According to Reuters technical analyst Wang Tao, palm oil may test resistance at 4,257 ringgit per metric ton. A break above that could trigger gains up to 4,295 ringgit.
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Market Outlook:
The palm oil market will now look toward:
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Upcoming export data for directional clarity
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Crude oil fluctuations
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Currency movement trends
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Import behavior of major buyers like India and China
While short-term weakness is driven by profit-taking and weaker external cues, strong import demand and currency softness may offer support at lower levels.
