KUALA LUMPUR: Malaysian palm oil futures recovered from losses in its early trading session on Thursday, rising for a second consecutive day on a weaker ringgit and expectations of falling output.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to 2,495 ringgit ($635.75) a tonne at the close of trade. It was earlier down at the midday break, tracking overnight losses in soyoil on the US Chicago Board of Trade.
Trading volumes stood at 33,495 lots of 25 tonnes each on Thursday evening.
"Palm rose on the weaker ringgit," said a Kuala Lumpur-based trader, while another trader added that expectations of falling output also supported the market.
"Overall though, the market has been trading sideways," he said.
A weaker ringgit, palm's currency of trade, supports the vegetable oil by making it cheaper for foreign buyers. It eased 0.5 percent against the dollar to 3.9245 on Thursday evening.
Malaysia's output for the full month of January is forecast to fall 14.9 percent to 1.56 million tonnes, its lowest levels in seven months and the sharpest monthly drop in two years, according to a Reuters poll.
In other related edible oils, the March soybean oil contract on the Chicago Board of Trade declined 1.8 percent on Wednesday, in line with soybean futures which fell as traders squared positions ahead of a monthly report due Thursday from the US Department of Agriculture.
It was last trading flat around 1033 GMT.
The May soybean oil on the Dalian Commodity Exchange was slightly up 0.1 percent while the Dalian May palm oil contract rose 0.2 percent.
Palm oil prices are impacted by other rival edible oils, as they compete for a share in the global vegetable oils market.
Palm oil looks neutral in a narrow range of 2,481-2,520 ringgit per tonne, according to said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Comments
Comments are closed for this article.