JAKARTA: Malaysian palm oil futures fell on Tuesday, tracking rival edible oils in Dalian and Chicago markets and crude oil prices.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange fell 106 ringgit, or 2.32 per cent, to RM4,461 (US$1,134.83) a metric ton by the midday break after falling to RM4,370 earlier.
"The futures is tracking external Dalian palm oil, Chicago soy oil and crude oil performance while waiting for Malaysian Palm Oil Board (MPOB) data," a Kuala Lumpur-based trader said.
Published during the midday break, MPOB data showed Malaysia's palm oil stocks fell 3.9 per cent in February from the previous month to a four-month low of 2.70 million metric tons.
Crude palm oil production declined 18.6 per cent from January to 1.28 million tons, while palm oil exports fell 22.5 per cent to 1.13 million tons.
Dalian's most-active soyoil contract lost 2.5 per cent, while its palm oil contract fell 1.44 per cent. Soyoil on the Chicago Board of Trade declined 0.5 per cent.
Palm oil tracks the price movement of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices fell on Tuesday after hitting an over three-year high in the prior session as US President Donald Trump predicted the war in the Middle East could end soon, easing concerns about prolonged disruptions to global oil supplies.
Lower crude oil futures make palm a less attractive option for biodiesel feedstock. Indonesia may revive a plan to launch a mandatory B50 grade of palm oil-based biodiesel in the middle of this year due to surging crude oil prices. Palm oil may bounce into a range of RM4,513-RM4,546 per metric ton, following its stabilisation around a support at 4,369, according to Reuters' technical analyst Wang Tao.
