KUALA LUMPUR: Malaysian palm oil futures rose more than 2% on Monday as trading resumed after a three-day closure, with prices lifted by a weakening ringgit and a surge in exports during the first half of September.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 80 ringgit, or 2.11%, to 3,863 ringgit ($850.32) a tonne during early trade. It was on course to end a two-session loss.
The contract is benefiting from a rise in soyoil prices last weekend, with the weaker ringgit also lending support, a Kuala Lumpur-based trader said. “Nevertheless, overhanging high stocks and negative margins in some destinations are keeping buyers away,” he added.
The ringgit, palm’s currency of trade, hit its lowest since January 1998, making the commodity cheaper for holders of foreign currency.
Further supporting sentiment, exports of Malaysian palm oil products for Sept. 1-15 rose between 19% and 25% from the same period in August, cargo surveyors said last week.
India, the world’s biggest edible oil buyer, has slashed the base import prices of crude and refined palm oil, as well as crude soya oil, as prices corrected in the world market.
Dalian’s most-active soyoil contract rose 1.1%, while its palm oil contract gained 2.2%.
Soyoil prices on the Chicago Board of Trade were up 0.3%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Farmers across Asia are busy planting trees to boost palm oil production but nurseries are struggling to keep up with demand for sprouts and seedlings, risking a delay in the industry’s recovery from the pandemic.
Palm oil may retest a support of 3,686 ringgit per tonne, a break below which could be followed by a further drop into 3,542-3,608 ringgit, Reuters technical analyst Wang Tao said.
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