Malaysian palm oil futures rose to their highest in more than four years on Friday, lifted by a volatile ringgit, better-performing rival oils and Thursday's government data showing lower-than-expected inventories. The ringgit, palm's traded currency, dropped 3.5 percent from its previous close in offshore forwards markets, though the onshore spot rate barely moved in trading.
A weaker ringgit usually makes palm oil cheaper for foreign buyers of the tropical oil, helping to spur demand. Benchmark palm oil futures for January on the Bursa Malaysia Derivatives Exchange gained 2.8 pct to 2,976 ringgit ($695) per tonne at the end of the trading day after earlier rising as much as 6.7 percent and reaching an intraday high of 3,089 ringgit, its highest since September 2012.
Palm charted a fifth straight session of gains and was up 5.8 percent for the week, recording its strongest weekly gains in more than a year. Traded volumes were 63,518 lots of 25 tonnes each on Friday, above the 2015 average of 44,600 lots traded in a day. "The ringgit has come under heavy pressure, lifting palm oil to a record high this morning," said one futures trader based in Kuala Lumpur.
Another trader added that palm was also supported by stronger performing rival oils on the Chicago Board of Trade and China's Dalian Commodity Exchange, and lower than forecast end-stocks data from the Malaysian Palm Oil Board. Palm oil's price movement is impacted by the performances of rival oilseeds such as soya, as they compete for a share in the global vegetable oils market. The December soyabean oil contract on the Chicago Board of Trade was up 1.3 percent, while the January soyabean oil contract on China's Dalian Commodity Exchange rose 1.6 percent.
In other related oils, the January contract for palm olein on China's Dalian Commodity Exchange surged 3.4 percent. Malaysia's palm oil stocks at end-October rose 1.8 percent to 1.57 million tonnes from September, versus a Reuters poll which forecast a 8.8 percent rise in inventories.
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