KUALA LUMPUR: Malaysian palm oil futures fell on Thursday evening, snapping three previous days of gains, tracking losses in soyoil and on the back of trade war concerns.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 1 percent at 2,191 ringgit ($537.80) a tonne at the end of the trading day.
Trading volume stood at 49,614 lots of 25 tonnes each at the close of trade.
“The market is concerned that U.S. soyoil will fall more tonight, since Trump plans to propose a 25 percent tariff on $200 billion in Chinese imports, instead of a 10 percent tariff,” said a Kuala Lumpur based trader.
President Donald Trump’s administration had initially announced it would seek to impose a tariff of 10 percent on $200 billion of Chinese imports, and raising the level to 25 percent would escalate the dispute over trade between the world’s two biggest economies.
The Chicago December soybean oil contract had declined 1.2 percent on Wednesday, and was last down 0.7 percent.
Palm oil prices are influenced by the performance of other edible oils as they compete for a share in the global vegetable oils market.
Palm oil had earlier hit a three week high of 2,233 ringgit, its highest levels since July 11, supported by a weaker ringgit and a revision of biodiesel rules in Indonesia. A weaker ringgit usually supports palm by making it cheaper for holders of foreign currencies.
Indonesia on Wednesday evening said it aims to make the use of biodiesel compulsory for all vehicles and heavy machinery from Sept. 1, to cut down on diesel imports and reduce the country’s current account deficit.