KUALA LUMPUR: Malaysian palm oil futures jumped as much as 3% on Thursday, ending near a two-week high, helped by a weak ringgit and forecasts of a El Nino weather pattern hitting production next year.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed up 91 ringgit, or 2.67%, to 3,498 ringgit ($788.73) a tonne.
Palm rose for a second consecutive session to its highest closing level since May 15.
Malaysia’s exports during May 1-25 fell 0.7% from the same week in April, cargo surveyor Intertek Testing Services said. Another cargo surveyor, AmSpec Agri Malaysia, said exports rose 0.7%.
Crude palm oil production in the world’s second largest producer could drop between 1 and 3 million tonnes next year due to the El Niño weather pattern, the Malaysian Palm Oil Board (MPOB) said.
Production plunged 20% during the 2016 El Niño event, but it should be less severe this year due to better planting material and improved labour conditions, the regulator’s director-general Ahmad Parveez Ghulam Kadir.
The ringgit fell 0.74% against the dollar to hit its lowest since November 2022, making the commodity cheaper for buyers holding foreign currency.
Dalian’s most-active soyoil contract gained 0.3%, while its palm oil contract rose 0.8%. Soyoil prices on the Chicago Board of Trade were up 0.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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