Palm falls more than 1 percent on firmer ringgit, weaker related oils

Imaduddin December 26, 2018

KUALA LUMPUR: Malaysian palm oil futures fell more than 1 percent on Wednesday evening, extending falls into a fourth session, as the ringgit strengthened while weakness in related edible oils also weighed on the market.

The ringgit, palm’s currency of trade, was last up 0.2 percent at 4.1750 per dollar. A stronger ringgit usually makes palm oil more expensive for holders of foreign currencies.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was down 1.6 percent at 2,094 ringgit ($501.56) a tonne at the close of trade. Earlier in the session, it fell to its weakest level since Dec. 14 at 2,093 ringgit.

Trading volumes stood at 22,765 lots of 25 tonnes each at the end of the trading day.

“December production is picking up … Coupled with weak exports, a firmer ringgit and weaker Dalian also weighed (on the palm market),” said a Kuala Lumpur-based futures trader, referring to related edible oils on China’s Dalian Commodity Exchange.

Malaysian palm oil exports for Dec. 1-25 declined from a month earlier, data from cargo surveyors showed.

Cargo surveyor Intertek Testing Services reported a 2.5 percent drop on Tuesday, while inspection company AmSpec Agri Malaysia said on Wednesday shipments fell 6.4 percent.

In other related oils, the January soybean oil contract on the Dalian Commodity Exchange fell 1.3 percent and the Dalian January palm oil contract declined 1.2 percent.

Palm oil prices have been impacted by changes in soyoil prices in recent sessions, as they compete for a share in the global vegetable oil market.

Copyright Reuters, 2018
 

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