KUALA LUMPUR: Malaysian palm oil futures were largely unchanged on Tuesday as strength in Dalian edible oils was offset by a firmer ringgit and weak Chinese demand.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed up 2 ringgit, or 0.05%, to 4,133 ringgit ($884.06). The contract was seen trading higher on supportive February output data in Malaysia as well as bullish momentum from Dalian vegetable oils futures, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“However, the stronger Malaysian ringgit and the absence of buying from key buyer China has capped the pace of the upside momentum in palm oil,” Bagani said.
Dalian’s most-active soyoil contract rose 0.92%, while its palm oil contract gained 1.08%. Soyoil prices on the Chicago Board of Trade were down 0.58%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Malaysia’s palm oil stocks at the end of February dwindled to their lowest levels in seven months as production hit a 10-month low, offsetting the slowdown in exports. Inventories at the end of February fell 5% from January to 1.92 million metric tons, crude palm oil production declined 10.18% to 1.26 million tons, while exports plunged 24.75%, data from industry regulator the Malaysian Palm Oil Board showed. The Malaysian ringgit, palm’s currency of trade, rose 0.13% against the dollar, making the commodity more expensive for buyers holding the foreign currency.
Exports of Malaysian palm oil products for March 1-10 rose 6.8% from the same period a month ago, cargo surveyor Intertek Testing Services said. Another cargo surveyor, AmSpec Agri Malaysia, said exports during the same period rose 6.2% from a month ago.
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