JAKARTA: Malaysian palm oil futures fell more than 3% on Tuesday, tracking declines in rival edible oils in Dalian and Chicago markets as well as in crude oil, a day after posting their biggest jump in three years.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange fell 139 ringgit, or 3.04%, to 4,428 ringgit ($1,129.59) a metric ton at the close after falling to 4,370 ringgit earlier.
“The futures is tracking external Dalian palm oil, Chicago soy oil and crude oil performance,” a Kuala Lumpur-based trader said.
MPOB data showed Malaysia’s palm oil stocks fell 3.9% in February from the previous month to a four-month low of 2.70 million metric tons.
Crude palm oil production declined 18.6% from January to 1.28 million tons, while palm oil exports fell 22.5% to 1.13 million tons.
READ MORE: Malaysian palm oil futures surge as rising crude boosts biodiesel outlook
Dalian’s most-active soyoil contract lost 3.14%, while its palm oil contract fell 1.29%. Soyoil on the Chicago Board of Trade declined 0.68%.
Palm oil tracks the price movement of rival edible oils as it competes for a share of the global vegetable oils market.
Crude oil prices plummeted 7% on Tuesday after soaring to a more than three-year high in the previous session as U.S. President Donald Trump predicted the war in the Middle East could end soon, easing concerns about prolonged disruptions to oil supplies.
Lower crude oil futures make palm a less attractive option for biodiesel feedstock.
Exports of Malaysian palm oil products for March 1-10 rose 45.3% compared to February 1-10, independent inspection company AmSpec Agri Malaysia said, while according to cargo surveyor Intertek Testing Services, it rose 37.9%.
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