Palm oil prices drop 3% after Argentina removes the export tax on soyoil

Cheaper Argentine soyoil is set to pressure palm oil demand in India and Africa, but tight Malaysian supply may cushion deeper losses.

• Palm oil futures in Malaysia slid 3.65% to 4,281 ringgit/ton after Argentina cut soyoil export taxes.

• Argentina’s tax suspension is valid until October-end or $7B in exports, aimed at boosting dollar inflows.

• Cheaper Argentine soyoil is pulling demand from palm oil in major markets like India and Africa.

• Global spillover: Dalian palm oil dropped 3.88%, Chicago soyoil fell 1.59%.

• Losses in palm oil are cushioned by slowing Malaysian output and monsoon-related yield risks.

• Crude oil weakness makes palm oil less attractive as a biodiesel feedstock.

• Technical outlook points to further downside, possibly toward 4,309 ringgit/ton.