KUALA LUMPUR: Malaysian palm oil futures hit their lowest in nearly a month on Wednesday evening, tracking weakness in crude oil and as the ringgit strengthened.
The Malaysian currency hit its strongest in about a year against the dollar and was last up 0.5 percent at 4.1730.
Gains in the ringgit, the currency of trade for palm, usually make the edible oil more expensive for foreign buyers.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was 0.2 percent lower at 2,713 ringgit ($650.13) a tonne at the close of trade, down for a fifth straight session.
It had earlier touched its lowest since Oct. 19 at 2,709 ringgit.
Traded volumes stood at 40,355 lots of 25 tonnes each at the end of the trading day.
"Palm's downside trend may prolong in view of the strengthening ringgit and weakness on the energy front," one Kuala Lumpur-based trader said.
Crude oil prices fell more than 1 percent, continuing Tuesday's slide after the International Energy Agency cast doubts over the recent narrative of tightening markets.
Global oil demand growth looks likely to increase more slowly over the coming months as warmer temperatures cut consumption, which could tilt the market back into surplus in the first half of next year, the agency said.
Lower exports also weighed on the market, another trader said, referring to cargo surveyor data released on Wednesday.
Exports of Malaysian palm oil products for Nov. 1-15 fell 4.3 percent from a month earlier, data from Intertek Testing Services showed.
Data from another cargo surveyor, Societe Generale de Surveillance, showed an 8.2 percent decline in palm oil exports for the same period.
Appetite for palm oil usually slows towards the end of the year in markets with winter seasons, such as China and Europe, because the tropical oil solidifies in cold temperatures.
In related edible oils, the December soybean oil contract on the Chicago Board of Trade rose 0.4 percent, while the January soybean oil contract on the Dalian Commodity Exchange declined by 1.1 percent. The Dalian January palm olein contract was down 1.4 percent.
Palm oil is affected by movements in other edible oils that compete for a share of the global vegetable oils market.
The February palm oil contract could fall more to 2,709 ringgit a tonne, having broken support at 2,739 ringgit, said Reuters technical analyst Wang Tao.
Comments
Comments are closed for this article.