Palm hits two-week low as ceasefire drags crude oil down
08/04/2026 (Business Recorder), Kuala Lumpur - Malaysian palm oil futures slid more than 3% on Wednesday,hitting their lowest in two weeks, as a sharp drop in crude oil prices following a U.S-Iran ceasefire deal weighed on the market.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed179 ringgit lower, or down 3.76%, at 4,586 ringgit ($1,154.00) a metric ton, the lowest since March 26.
Palm oil markets are currently tracking developments in the Middle East conflict closely, mirroring movements in crude oil prices, said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading company.
Oil fell below $100 a barrel after U.S. President Donald Trump said he had agreed to a two-week ceasefire with Iran, subject to the immediate and safe reopening of the Strait of Hormuz.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Singh said palm oil prices were expected to find support at about 4,500 ringgit, underpinned by a possible B20 biodiesel mandate in Malaysia and lower inventory levels.
Malaysia plans to expand its palm-based B20 biodiesel programme nationwide in phases, taking into account the price sensitivity of palm oil relative to petroleum prices, the plantation and commodities minister said.
Dalian’s most-active soyoil contract fell 3.07%, while its palm oil contract shed 4.36%. Soyoil prices on the Chicago Board of Trade were down 3.28%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, strengthened 1.34% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Indonesia’s energy ministry has issued a ministerial decree setting the timeline for the implementation of its biofuel blending mandate, an official said, as it tries meet its energy transition and self-sufficiency targets.