Vegoils: Palm oil edges up; cautious over China-U.S. tariff war

ripplesadvisoryMalaysian palm oil futures were slightly up on Friday, and set to snap three sessions of declines, though traders say it is mostly trading sideways on caution over the China-U.S. trade spat.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,289 ringgit ($566.30) a tonne at noon.

Palm, however, was down 1.6 percent for the week so far, as weak demand weighed on prices.

Trading volumes stood at 12,260 lots of 25 tonnes each at the midday break.

“The market is trading sideways today. Traders are waiting to see what would happen with regard to the China-U.S. tariffs,” said a futures trader in Kuala Lumpur.

“Palm’s current gain is a small retracement after seeing drops in the past three days.”

U.S. tariffs on $34 billion worth of Chinese imports took effect as a deadline passed on Friday, and with Beijing having vowed to respond immediately in kind, the world’s two biggest economies took a high-stakes turn towards an all-out trade war.

Another trader said a weak ringgit also helped in supporting palm prices, as this makes the tropical oil cheaper for holders of foreign currencies.

The ringgit, palm’s currency of trade, is currently at six month lows and lost 1.5 percent last month. It was last down 0.02 percent at 4.0420 against the dollar around noon Friday.

In other related oils, the Chicago December soybean oil contract was down 0.1 percent, while the September soybean oil on China’s Dalian Commodity Exchange rose 1 percent.

Meanwhile, the Dalian September palm oil contract was slightly down 0.1 percent.

Palm oil prices track the performance of other edible oils as they compete for a share in the global vegetable oils market.

Palm, soy and crude oil prices at 0511 GMT

Contract Month Last Change Low High Volume

MY PALM OIL JUL8 0 +0.00 0 0 0

MY PALM OIL AUG8 2286 +7.00 2274 2289 627

MY PALM OIL SEP8 2289 +5.00 2277 2293 4884

CHINA PALM OLEIN SEP8 4814 -6.00 4788 4856 169444

CHINA SOYOIL SEP8 5628 +54.00 5580 5644 274416

CBOT SOY OIL DEC8 29.01 +0.00 28.93 29.03 3485

INDIA PALM OIL JUL8 632.40 +0.10 631.50 632.8 49

INDIA SOYOIL JUL8 755.35 +0.55 753.2 755.5 650

NYMEX CRUDE AUG8 73.01 +0.07 72.63 73.19 41689

Palm oil prices in Malaysian ringgit per tonne

CBOT soy oil in U.S. cents per pound

Dalian soy oil and RBD palm olein in Chinese yuan per tonne

India soy oil in Indian rupee per 10 kg

Crude in U.S. dollars per barrel

($1 = 4.0420 ringgit)

($1 = 68.8575 Indian rupees)

($1 = 6.6547 Chinese yuan)

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