Palm opens lower on weaker rival oils, crude oil prices
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid RM54, or 1.37 per cent, to RM3,889 (US$900.23) a metric ton in early trade.
FUNDAMENTALS
Dalian's most-active soyoil contract fell 0.36 per cent, while its palm oil contract shed 0.81 per cent. Soyoil prices on the Chicago Board of Trade were down 0.49 per cent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices edged lower as US President Donald Trump's erratic tariff policies raised concerns about weakening global economic growth and fuel demand.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm's currency of trade, strengthened 0.18 per cent against the US dollar, making the commodity more expensive for buyers holding foreign currencies.
Indonesia lowered its crude palm oil reference price to US$924.46 per ton for May, a trade regulation showed.
European Union soybean imports in the 2024/25 season that started in July had reached 11.46 million tons by April 27, up 8 per cent from a year earlier, while palm oil imports were at 2.37 million tons, down 19 per cent, data by the European Commission showed.
Palm oil may revisit its April 21 low of RM3,863 per metric ton, as it has overcome the last barrier at RM3,931, Reuters technical analyst Wang Tao said.
Shares struggled for direction and oil prices slid as relief over a potential easing of global trade tensions was offset by a worsening economic outlook and dour signals from corporates swept up by Trump's tariffs.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
6 hours ago
- The Star
Trump tariffs leave costly China supply question unanswered; Indonesia among countries deeply affected
JAKARTA (Bloomberg): President Donald Trump's recent flurry of trade deals have given Asian exporters some clarity on tariffs, but missing are key details on how to avoid punitive rates that target China's supply chains. Trump unveiled tariffs of 20% for Vietnam and 19% for Indonesia and the Philippines, signaling those are the levels the US will likely settle on for most of Southeast Asia, a region that ships US$352 billion worth of goods annually to the US. He's also threatened to rocket rates up to 40% for products deemed to be transshipped, or re-routed, through those countries - a move largely directed at curbing Chinese goods circumventing higher US tariffs. But still unclear to manufacturers is how the US will calculate and apply local-content requirements, key to how it will determine what constitutes transshipped goods. South-East Asian nations are highly reliant on Chinese components and raw materials, and US firms that source from the region would bear the extra tariff damage. That's left companies, investors and economists facing several unanswered questions about Trump's tariffs that appear aimed at squeezing out Chinese content, according to Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore. "Is that raw materials? All raw materials? Above a certain percentage?' she said. "How about parts? What about labor or services? What about investment?' In an agreement with Indonesia last week, the White House said the two countries would negotiate "rules of origin' to ensure a third country wouldn't benefit. The deal with Vietnam earlier this month outlined a higher 40% tariff rate for transshipped goods. And Thai officials, who have yet to secure a deal, detailed that they likely need to boost local content in exports to the US. Missing Details The Trump administration isn't providing much clarity on the matter right now. US officials are still working out details with trading partners and looking at value-based local content requirements, to ensure exports are more than just assembled imported parts, according to a person familiar with the matter, who didn't want to be identified discussing private talks. A senior Trump administration official also said this week that details on the approach to transshipment are expected to be released before Aug. 1, the deadline for when higher US tariffs kick in. Some factories are already adjusting their supply chains to comply with rules that will require more locally-made components in production. Frank Deng, an executive at a Shanghai-based furniture exporter with operations in Vietnam - and which gets about 80% of business from the US - said in an interview his firm is making adjustments as authorities appear to be more strictly enforcing country-of-origin rules. Vietnam has always had specific local content requirements for manufacturers, Deng added, including that a maximum of 30% of the volume of raw materials originates from China, and the value after production in Vietnam must be 40% higher than the imported raw materials. "We've been struggling to meet all the standards so that we can still stay in the game,' Deng said. "But I guess that's the only way to survive now.' For most of Southeast Asia, reducing the amount of Chinese-made components in manufacturing will require a complete overhaul of their supply chains. Estimates from Eurasia Group show that Chinese components make up about 60% to 70% of exports from Southeast Asia - primarily industrial inputs that go into manufacturing assembly. About 15% of the region's exports now head to the US, up about four percentage points from 2018. Local Content The US has become increasingly vigilant about China's ability to bypass US trade tariffs and other restrictions through third countries since Trump's first trade war in 2017. Thailand signaled its frustration over the lack of clarity for how much local content is needed in goods exported to the US to avert transshipment rates, but noted it will likely be much higher than a traditional measure of 40%. "From what we've heard, the required percentage could be significantly higher, perhaps 60%, 70%, or even 80%,' Deputy Prime Minister Pichai Chunhavajira said July 14. "Emerging countries or new production bases are clearly at a disadvantage,' he said, as their manufacturing capabilities are still at an early stage and must rely on other countries for raw goods. Vietnam, Thailand and Malaysia have all taken steps this year to address Trump's concerns, increasing scrutiny of trade that passes through their ports including new rule-of-origin policies that centralize processing and imposing harsh penalties on transshippers. Developing nations may still struggle to enforce Trump's rules or comply with the rules if it means going up against China, their largest trading partner and geopolitical partner. "The reality is it's not enforceable at all,' said Dan Wang, China director at Eurasia Group. "Chinese companies have all kinds of ways to get around it and those other countries have no incentive to enforce those measures, or capacity to collect the data and determine local content.' -- Reports from Patpicha Tanakasempipat, Skylar Woodhouse and Nguyen Dieu Tu Uyen. -- ©2025 Bloomberg L.P.
The Star
6 hours ago
- The Star
US drops sanctions on Myanmar junta allies after Trump praise
A trishaw driver rides as his passenger uses an umbrella to cover themselves from the rain in Yangon on July 21, 2025. -- Photo by Sai Aung MAIN / AFP YANGON (AFP): The United States has lifted sanctions on several allies of Myanmar's ruling general and their military-linked firms, a US Treasury notice shows, after the junta chief sent a glowing letter of praise to President Donald Trump. Junta chief Min Aung Hlaing seized power in a 2021 coup, deposing the civilian government and sparking a civil war that has killed thousands, leaving 3.5 million displaced and half the nation in poverty. Two weeks ago, the top general sent a letter to Trump, responding to his threat of tariffs by lauding his presidency with praise, including for shutting down US-funded media outlets covering the conflict. A US Treasury notice on Thursday said sanctions were dropped against KT Services and Logistics, the Myanmar Chemical and Machinery Company, and Suntac Technologies -- as well as their managers. In a statement, a US Treasury Department spokesperson denied there was an "ulterior motive" in the move, although the notice did not provide a reason for the removals. "Anyone suggesting these sanctions were lifted for an ulterior motive is uninformed and peddling a conspiracy theory driven by hatred for President Trump," said the spokesperson, on condition of anonymity. They added that individuals were "regularly added and removed" from the sanctions list "in the ordinary course of business." KT Services and Logistics and its CEO Jonathan Myo Kyaw Thaung were described as junta "cronies" when they were sanctioned in 2022 for leasing Yangon's port from a military firm for $3 million a year. The Myanmar Chemical and Machinery Company and its owner, Aung Hlaing Oo, and Suntac Technologies owner Sit Taing Aung were sanctioned later that year for producing arms, including tanks and mortars. A third Myanmar national, Tin Latt Min -- who the US previously described as owning "various companies that are closely related to the regime" -- was also removed from the sanctions list. Trump sent a letter to junta chief Min Aung Hlaing earlier this month, one among a raft of missives despatched to foreign leaders during his global tariff blitz. The letter -- believed to be Washington's first public recognition of the junta's rule since the coup -- threatened Myanmar with a 40 percent levy unless a trade deal was struck. Min Aung Hlaing responded with a multi-page letter expressing his "sincere appreciation" for Trump's message and praising his "strong leadership". - AFP
Barnama
8 hours ago
- Barnama
AirAsia Launches Direct KL, Kuching–Pontianak Routes From Sept 12
BUSINESS KUALA LUMPUR, July 26 (Bernama) -- AirAsia Malaysia has launched two new direct routes connecting Kuala Lumpur and Kuching to Pontianak, the capital city of West Kalimantan, Indonesia, with AirAsia as the only airline operating international flights to the city starting Sept 12, 2025. In a statement, the company said the expansion follows AirAsia's rapid growth in Indonesia, including the recent launch of the Kuala Lumpur–Palembang route in July and the upcoming Kuala Lumpur–Semarang service in September. 'With the introduction of Pontianak, AirAsia Malaysia will operate to a total of 17 destinations in Indonesia through 223 weekly flights between the two countries, solidifying its position as the airline with the widest network serving Indonesia,' it said. The launch of these new routes strengthens regional connectivity and supports both governments' targets, including Malaysia's goal of attracting 4.3 million Indonesian tourists in 2025 and Sarawak's target of five million visitor arrivals by year-end. It also aims to contribute to Indonesia's national target of 16 million international arrivals, with Malaysia remaining one of its top source markets, it said. The new routes were unveiled during the Sarawak Travel Fair, organised by the Sarawak Tourism Board in Pontianak, and officially launched by West Kalimantan Governor Drs Ria Norsan. He said the new direct routes will not only facilitate easier access for travellers but also bolster trade, investment and tourism flows. 'West Kalimantan stands ready to welcome more Malaysian visitors while providing convenient access for Indonesians seeking business opportunities, leisure travel and medical services in Sarawak and Kuala Lumpur,' he said. Consulate of Malaysia in Pontianak, Consul Azizul Zekri Abd Rahim said the new connectivity marks a pivotal moment in fostering stronger bilateral ties between Malaysia and Indonesia, particularly West Kalimantan.
