Palm oil prices drop amid weaker soy oil market

December 30, 2024 (MLN): Malaysian palm oil futures traded lower on Monday, reflecting the decline in rival soyoils on the Dalian market, as the market awaited further catalysts during the holiday season, as Reuters reported.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 4 ringgit, or 0.09%, to 4,620 ringgit ($1,034.25) a metric ton by the midday break.

“Today’s futures will be lacklustre, tracking Dalian while waiting for the holiday season to be over for further leads,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract dropped 0.31% while its palm oil contract added 0.11%.

Soyoil prices on the Chicago Board of Trade rose 0.28%.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Oil prices edged up on Monday in thin holiday trade ahead of the year-end as traders awaited more Chinese and US economic data later this week to assess growth in the world’s two largest oil consumers.

Stronger crude oil futures are making palm oil a more appealing choice for biodiesel production, as palm oil is often used as a feedstock for biodiesel.

Meanwhile, the Malaysian ringgit, which is the currency used for trading palm oil, rose slightly by 0.02% against the U.S. dollar.

This slight increase makes palm oil a bit more expensive for buyers who use other foreign currencies to purchase it.

Additionally, cargo surveyors have reported a drop in Malaysian palm oil exports, estimating a decrease of 1.1% to 4% in exports between December 1-25 compared to the previous month (November 1-25).

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