Business Recorder
JAKARTA: Malaysian palm oil futures closed lower on Thursday, after three straight sessions of gains, as softer Dalian’s palm olein prices triggered profit-taking. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange lost 49 ringgit, or 1.06%, to 4,579 ringgit ($1,155.44) a metric ton at the close. “The futures were seen trading lower today on profit-taking, sighting a similar sentiment in Dalian’s Palm olein futures in Asian hours today and in Chicago’s soyoil futures Wednesday overnight,” said Anilkumar Bagani, commodity research head at Mumbai-based brokerage Sunvin Group. Dalian’s most-active soyoil contract edged up 0.09%, while its palm oil contract fell 0.05%. Soyoil prices on the Chicago Board of Trade lost 0.2%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Additionally, Indonesia’s B50 allocations will give an idea regarding the increase in palm oil consumption in biofuels, Bagani said. Starting July 1, Indonesia will raise the mandatory palm oil-based biodiesel content from the current 40% to 50%, hence B50, with the remainder consisting of conventional diesel. The programme is part of the government’s strategy to reduce its dependence on costly fuel imports. Oil prices extended gains on Thursday, rising more than $1 on stalled peace talks between Iran and the United States and continued restrictions on trade through the Strait of Hormuz. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.3% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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