Malaysian palm oil futures rose on Friday as weakness in the ringgit helped it to reverse some losses after hitting a one-week low in the previous session. The ringgit, which has been weakening since April 3, fell to its lowest since Jan. 25. A weaker ringgit, the currency in which the futures are traded, makes the commodity more attractive to buyers holding foreign notes.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.4 percent at 2,162 ringgit ($525.78) a tonne. The market dropped as much as 2 percent on Wednesday as official data showed March end-stocks and production at higher levels than expected.
Palm fell 2.8 percent this week. "The market is bottoming out from the support level of 2,148 to 2,150 ringgit per tonne with supportive weakness in the ringgit," one Kuala Lumpur-based trader said. Traders said the market had anticipated a favourable government announcement after local media reported on Monday that negotiations on a China-backed rail project could include a palm oil export deal for Malaysia.
No announcement came but the softer ringgit continued to hold up market sentiment, the traders said. In related oils, the Chicago May soyabean oil contract firmed by 0.3 percent. The May soyaoil contract on the Dalian Commodity Exchange eased by 0.1 percent while the Dalian May palm oil contract rose 0.3 percent. Palm oil prices are affected by movements in soyaoil, with which it competes in the global vegetable oil market.
Comments
Comments are closed for this article.