Palm jumps over 3pc, books weekly gain on weaker ringgit

KUALA LUMPUR: Malaysian palm oil futures jumped more than 3% on Friday and logged their third straight weekly rise, lifted by a weaker ringgit and tracking stronger rival oils on the Dalian Exchange.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed up 129 ringgit, or 3.42%, at 3,898 ringgit ($930.53) a tonne, its largest one-day rise since June 15.

Palm advanced 2.9% this week, marking its longest weekly gaining streak since early January.

Palm oil falls

The ringgit plunged to a near one-year low and stoked bargain-buying, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

The ringgit, palm's currency of trade, weakened 0.22% against the dollar after Malaysia's key ally in the ruling coalition withdrew support for Prime Minister Muhyiddin Yassin late on Wednesday and called on him to resign at a time when the country remains in a COVID-19 lockdown.

"The current situation will depend on how quickly the domestic political situation is resolved, but so far there are no clear outcomes to be expected, which may depreciate the ringgit further," Varqa said.

Palm oil rises to near 4-week peak on strong Indian demand

Meanwhile, market talk before the release of data from cargo surveyors on Saturday pegged July 1-10 exports to fall 2.6% from the month before.

The Malaysian Palm Oil Board is also scheduled to release June supply-and-demand data on Monday.

The Malaysian Palm Oil Association this week estimated June production to rise 1.6% from the month before, according to traders, much slower than a 7.5% rise predicted in a Reuters Survey.

Dalian's most-active soyoil contract gained 2.1%, while its palm oil contract rose 3.5%. Soyoil prices on the Chicago Board of Trade were up 1.4%.

Palm oil falls ahead of Indonesia's export levy reduction, export data

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.