KUALA LUMPUR: Malaysian palm oil futures fell as much as 1.9 percent on Monday evening, hitting their lowest in more than a week, tracking losses in crude and weaker related edible oils.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 1.5 percent at 2,418 ringgit ($607.54) a tonne at the close of trade. It had touched an intraday low of 2,408 ringgit, its weakest since May 17.
Trading volume stood at 38,797 lots of 25 tonnes each at the close of trade.
“The market is in negative correction mode, in tandem with weak Dalian and crude oil,” said one Kuala Lumpur-based futures trader, referring to China’s Dalian Commodity Exchange.
Palm oil prices hit a seven-week peak last week, tracking gains in soyoil and boosted by a weaker ringgit, which makes the edible oil more affordable for foreign currency holders.
Movements in crude oil also affect prices for palm oil, which is used as a feedstock for biodiesel. Oil prices fell about 2 percent on Monday on market expectations that the world’s three leading crude producers — Russia, the United States and Saudi Arabia — will increase output.
In related oils, the Chicago July soybean oil contract fell 1.2 percent on Friday but U.S markets were closed on Monday for a national holiday.
September soybean oil on China’s Dalian Commodity Exchange was down 1.2 percent while the Dalian September palm oil contract dropped 2.5 percent.
Palm oil is affected by movements in rival edible oils competing in the global vegetable oils market.