Malaysian palm oil futures fell to their lowest in a month on Wednesday, weighed down by a stronger ringgit and weak export demand. The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed 1.9 percent lower at its intra-day low of 2,488 ringgit ($598) per tonne at the end of the trading day. The contract closed at its weakest level since January 29.
Traded volume stood at 31,613 lots of 25 tonnes each.
"The dollar is weaker and demand is still slow," said a trader from a brokerage firm in Kuala Lumpur.
A weaker dollar on Wednesday pushed the ringgit to 4.1600, up 0.1 percent against the greenback in evening trade. A stronger ringgit, the currency palm oil is traded in, makes the tropical oil more expensive for holders of foreign currencies.
Demand for Malaysian palm oil products fell 17-18 percent for the full month of February compared with the previous month, according to export data from cargo surveyors Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS).
Malaysian shipments for palm oil have been slowing in recent weeks due to a fall in consumer demand from top palm importers China and India.
Palm oil is expected to drop to 2,481 ringgit per tonne, as it has cleared support at 2,519 ringgit, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
In competing vegetable oil markets, the May soybean oil contract on the Dalian Commodity Exchange fell 1.0 percent, while the Chicago soyoil contract edged up 1.2 percent.
Comments
Comments are closed for this article.