JAKARTA: Malaysian palm oil futures extended gains to a second session on Friday on bargain-hunting, but were set for a weekly drop due to sluggish exports and a stronger ringgit.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose 0.93% to 3,816 ringgit ($902.98) per tonne in early trading after Thursday’s 0.75% gain. So far this week, the contract has declined 2.52%.
Exports of Malaysian palm oil products for Jan. 1-25 fell 28.4% to 876,193 tonnes from the same period a month earlier, cargo surveyor Societe Generale de Surveillance said on Thursday. Malaysia maintained its February export tax for crude palm oil at 8% and raised its reference price, a circular on the Malaysian Palm Oil Board website showed on Thursday.
Soyoil prices on the Chicago Board of Trade fell 0.18% during Asia hours, after rebounding 0.40% a day earlier. The Dalian exchange is closed this week for the Lunar New Year celebration.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. The Malaysian ringgit strengthened against the US dollar for a sixth straight session, hitting a nine-month high.
A stronger ringgit, in which palm oil is traded, makes it less attractive for dollar holders. Palm oil may bounce more towards 3,888 ringgit per tonne, following its stabilisation around the support of 3,721 ringgit, the Dec. 12, 2022 low, Reuters technical analyst Wang Tao said.