Malaysian palm oil futures rose on Thursday, snapping four straight sessions of losses, on the back of a weaker ringgit which hit a one-week low. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 0.6 percent at 2,513 ringgit ($586.33) a tonne at the close of trade.
Traded volumes stood at 56,970 lots of 25 tonnes each on Thursday evening. "The market is up on currency play as the ringgit is weaker today," a trader from Kuala Lumpur said. "Maybe partly it is also supported by exports, but it is mostly currency related."
Palm oil prices are affected by the movements of the ringgit, the currency in which it is traded. A weaker ringgit typically makes the tropical oil cheaper for holders of foreign currencies.
The ringgit weakened 0.2 percent against the dollar on Thursday, after having touched a one-week low of 4.2885 earlier in the day. Cargo surveyor export data released on Wednesday showed stronger on-month shipments from Malaysia in May. Intertek Testing Services showed a 16 percent rise from April, while Societe Generale de Surveillance reported a 15.4 percent gain. Buyers of the tropical oil usually stock up on purchases one to two months ahead of Ramadan, which this year began on Saturday.
Palm oil may bounce to a resistance at 2,523 ringgit per tonne, Wang Tao, a Reuters market analyst for commodities and energy technicals, said. In other related oils, soyabean oil on the Chicago Board of Trade was up 0.3 percent, while the September soyabean oil contract on the Dalian Commodity Exchange was down 1.2 percent. The September contract for palm olein declined 1.2 percent. Palm oil prices are also affected by the performance of related edible oils, as they compete for a share in the global vegetable oils market.
Comments
Comments are closed for this article.