Lang
Malaysian palm oil futures closed lower on Tuesday, pressured by weakness in rival Dalian oils and uncertainty in global vegetable oil markets.
The benchmark palm oil contract for May delivery on Bursa Malaysia Derivatives fell by RM137, or 3.06%, to close at RM4,347, equivalent to $973.79, per metric tonne.
This was the lowest closing level in nearly a month.
Market participants said trade-related uncertainty increased pressure on global vegetable oil markets and raised concerns among traders.
The most-active soybean oil contract on Dalian fell by 0.9%, while the palm oil contract declined by 3.08%.
Soybean oil prices on the Chicago Board of Trade also fell by 0.55%.
Palm oil tracks price movements in rival vegetable oils because it competes for share in the global vegetable oils market.
Malaysia’s palm oil stocks are expected to fall in February to their lowest level in nearly three years because of production disruptions caused by flooding, according to a Reuters survey.
Meanwhile, India’s palm oil imports rose by 36% month on month in February after hitting their lowest level since March 2011 in January, according to trader estimates.
Crude oil prices also extended losses, reducing palm oil’s appeal as a feedstock for biodiesel production.
Weaker crude oil futures make palm oil a less attractive option for biodiesel use.