Malaysian palm oil futures experienced a notable decline, reaching a 10-week low on Monday. This downturn was primarily driven by falling soyoil and crude oil prices, compounded by concerns over potential global trade tensions following China’s announcement of retaliatory tariffs on U.S. goods. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell by 146 ringgit, or 3.37%, closing at 4,182 ringgit (approximately $934.32) per metric ton. At one point during the session, the contract dropped to 4,163 ringgit, marking its lowest price since January 24.
This decline represents a cumulative loss of 6.84% over three consecutive sessions. Commodity research head Anilkumar Bagani from Sunvin Group noted that the drop in crude palm oil futures paralleled significant declines in Chicago soyoil prices alongside weaker energy prices. The overall market volatility was intensified by OPEC’s decision to increase crude oil production, coupled with U.S. tariffs. These factors have contributed to a bearish macroeconomic outlook, impacting demand for palm oil as a biodiesel feedstock.
The price of soyoil also slid, with Dalian’s leading soyoil contract falling by 3.82% and palm oil contract dropping by 5.39%. Meanwhile, soyoil prices on the Chicago Board of Trade decreased by 2.18%. As a result of these fluctuations, major Malaysian plantation stocks suffered considerable losses. Notably, TH Plantations Berhad saw a sharp decline of 9.73%, followed by FGV Holdings Berhad and Sarawak Oil Palms with losses of 6.48% and 5.69%, respectively.
Additionally, the ringgit weakened by 0.95% against the dollar, making palm oil more affordable for international buyers.