KUALA LUMPUR: Malaysian palm oil futures ended higher on Tuesday as the ringgit hit its lowest in five-and-a-half years, making the vegetable oil cheaper for buyers holding other currencies.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange rose 45 ringgit, or 1.09%, to 4,183 ringgit ($937.05) a tonne.
Prices fell 6.4% on Monday, the most in a month, on lacklustre mid-August exports data and weaker crude oil prices.
A widening discount between crude palm oil and soybean oil, now at about $520 per tonne, and a weakening ringgit have spurred demand, Refinitiv Commodities Research said in a note late on Monday. The ringgit fell 0.16% against the dollar to hit its lowest since January 2017. The currency has weakened around 7% so far this year.
The market was also supported by short-covering and technical buying after prices managed to stay above 4,100 ringgit, a Kuala Lumpur-based trader said.
Exports of Malaysian palm oil products for Aug. 1-15 fell 9.5% to 516,072 tonnes from the same period in July, cargo surveyor Societe Generale de Surveillance said. Dalian’s most-active soyoil contract fell 1.2%, while its palm oil contract lost 1.1%. Soyoil prices on the Chicago Board of Trade were down 1.2%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.