Palm drops 2% to two-year low on US-China trade conflict

KUALA LUMPUR: Malaysian palm oil futures fell over 2% to a two-year low yesterday evening, tracking weakness in related oils on China’s Dalian Commodity Exchange and as an escalating US-China trade conflict weighed on the market.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 2.4% at RM2,204 a tonne at the close of trade, after hitting its lowest since July 14, 2016 at RM2,202. The contract posted its sharpest intraday drop in over four months in its second straight session of declines.

Trading volumes stood at 41,205 lots of 25 tonnes each.

“The market is down mainly on external factors,” said a Kuala Lumpur-based trader, referring to related edible oils on the US Chicago Board of Trade and Dalian.

“Especially so on Dalian as the US-China trade war escalates,” she said.

The United States said yesterday it would slap 10% tariffs on an extra US$200 billion (RM803 billion) worth of Chinese imports, including numerous consumer items, causing a sell-off in Chinese markets and stocks across Asia. – Reuters