KUALA LUMPUR: Malaysian palm oil futures snapped a five-session winning streak to end lower on Tuesday as Chicago soyoil prices tumbled after the U.S. announced that it would delay implementing import tariffs on Mexico and Canada.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange slid 63 ringgit, or 1.44%, to 4,304 ringgit ($969.37) a metric ton at the close.
The crude palm oil futures were dragged down by weakness in the Chicago soyoil market, a Kuala Lumpur-based trader said.
“The news that the U.S. will postpone imposing import tariffs on Mexico and Canada caused a heavy sell-off in Chicago soybean oil this morning,” the trader said.
Soyoil prices on the Chicago Board of Trade were down 2.54%. The Dalian Commodity Exchange was closed for the Chinese Lunar New Year and will reopen on Wednesday.
Malaysian palm oil higher on stronger Chicago soyoil
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
India’s palm oil imports in January plunged to their lowest level in nearly 14 years as refiners replaced the tropical oil with cheaper rival soyoil because of negative refining margins, five dealers said.
U.S. crude prices fell by nearly 2% as U.S. tariffs on China took effect. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.67% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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