SINGAPORE: Malaysian palm oil futures recovered on Tuesday, helped by a weaker ringgit, although imminent oversupply concerns and weakness in rival edible oils capped gains.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange finished 20 ringgit, or 0.51%, higher at 3,930 ringgit ($846.44) per metric ton.
“The weaker ringgit helped elevate prices today, although production is gaining traction in Malaysia and demand remains anaemic, thus the overall market remains susceptible to sell on strength,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
The Malaysian ringgit, palm’s currency of trade, last firmed 0.19% against the dollar, but remained at a near two-month low. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Palm ends lower on weaker Malaysian exports, Dalian gains cap losses
Dalian’s most-active soyoil contract fell 0.9%, while its palm oil contract dipped 0.5%. Soyoil prices on the Chicago Board of Trade lost 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
India is poised for its lowest monsoon rains in eight years, with the El Niño weather pattern seen crimping September precipitation after an August that is on track to be the driest in more than a century, two weather department officials told Reuters on Monday.
Exports of Malaysian palm oil products during Aug. 1-25 declined between 4.3% and 7.8%, independent inspection company AmSpec Agri Malaysia and cargo surveyor Intertek Testing Services said on Friday.
Indonesia’s palm oil exports, including refined products, in June stood at 3.45 million tons, while the stock by June end was at 3.69 million tons, the Indonesian Palm Oil Association’s data showed.
Palm oil looks neutral in a range of 3,909-3,963 ringgit per metric ton, and an escape could suggest a direction, said Reuters technical analyst Wang Tao.
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