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Palm Oil Futures Plunge Over 3% on Weaker Dalian and Crude Oil Prices

4 Jun 2024 4:05 pm
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Mumbai, June 04 (Commoditiescontrol): Malaysian palm oil futures experienced a sharp decline of over 3% upon resumption of trading following a public holiday. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed at 3,920 ringgit ($834.04) per metric ton, marking its steepest daily decline since May 31, 2023.

This downturn is attributed to a combination of factors, including weakness in rival Dalian contracts and a slump in crude oil prices.

Dalian's most-active soy oil contract fell 1.58%, while its palm oil contract lost 1.75%. Soyoil prices on the Chicago Board of Trade were down 0.29%.

Additionally, a decline in crude oil prices further exacerbated the situation. As crude oil becomes cheaper, it diminishes palm oil's appeal as a feedstock for biodiesel production.

Although the Malaysian ringgit, the currency in which palm oil is traded, slightly strengthened against the dollar, this marginal gain failed to offset the downward pressure exerted by the broader market trends.

The substantial drop in palm oil futures serves as a stark reminder of the interconnectedness of global commodity markets. Fluctuations in related markets, coupled with macroeconomic factors such as crude oil prices, can trigger significant price volatility in the palm oil sector. Market participants should remain vigilant and closely monitor these interdependencies to navigate the complexities of the commodity landscape effectively.

Global Futures Palm oil and Soy Oil

(By Commoditiescontrol Bureau; +91-9820130172)



       
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