Palm oil continues losing value as cheaper oils compete
Tuesday saw a slight fall in Malaysian palm oils futures. This resulted in further losses for the second consecutive session. Prices were impacted by weaker competitors and lowered prices. However, lower crude oil prices helped to limit the declines.
- Bursa Malaysia’s Derivatives Exchange saw the benchmark palm oil contract, for May delivery, fall 7 ringgit (or 0.16%) to 4,276 ringsgit ($956.17) early activity.
- Losses were experienced by both the palm oil contract DCPcv1 and the soy contract DBYcv1 in Dalian, which are the most active.
- The Chicago Board of Trade (BOcv1) reported that soybean oil prices rose 0.12%.
Palm oil is affected by the price of other oils because they compete for a share of the global vegetable oil markets. Oil prices started to rise as business leaders expressed worries about the market’s limited spare capacity and the unpredictability of Russian supply as demand from top oil importer China is increasing.
Because of stronger crude oil futures, palm is a more attractive alternative to biodiesel feedstock.
An industry expert says the European Union deforestation regulation is unlikely to have an impact on Southeast Asian palm oils.