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Markets

Palm oil closes lower; clocks second straight yearly fall

KUALA LUMPUR: Malaysian palm oil futures closed slightly down on Monday as a stronger ringgit weighed on the last tr

Dec 31 2018

KUALA LUMPUR: Malaysian palm oil futures closed slightly down on Monday as a stronger ringgit weighed on the last trading day of 2018, charting a second consecutive year of declines as high inventories and weak demand pushed down prices.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed 0.1 percent lower at 2,119 ringgit ($513.08) a tonne, snapping two earlier sessions of gains, and was down 15.3 percent for the year.

The market had earlier climbed as much as 0.9 percent to a one-week high of 2,140 ringgit, but later pared some gains on a stronger ringgit and profit-taking, traders said.

Trading volumes stood at 15,659 lots of 25 tonnes each on Monday evening.

"Further appreciation in the local currency and profit-taking interest capped upside movements," a Kuala Lumpur-based trader said.

Gains in the ringgit, palm's traded currency, usually make the edible oil more expensive for foreign buyers. The ringgit had strengthened by 0.5 percent to its strongest levels in three months, and was last at 4.1300 per dollar on Monday evening.

In other related oils, the Chicago January soybean oil contract was up 0.3 percent, in line with gains in soybean prices.

US soybean futures climbed to their highest in more than a week on Monday, buoyed by hints of improved trade relations between Washington and Beijing that could boost China's soybean purchases.

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

Copyright Reuters, 2018