JAKARTA: Malaysian palm oil futures extended gains to the fourth straight session on Wednesday, taking cues from stronger related vegetable oil prices on the Dalian exchange, but a firmer ringgit capped its gains.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 32 ringgit or 0.82% to 3,925 ringgit ($915.99) a metric ton.
“Palm futures prices opened higher, tracking spread adjustment against the competing vegetable oils,” said a Kuala Lumpur-based trader, adding that bargain buying activities also supported prices.
Dalian’s most-active soyoil contract rose 1.15%, while its palm oil contract for September delivery surged 2.17%. However, soyoil prices on the Chicago Board of Trade (CBOT) lost 0.6%.
Palm oil tracks the prices of rival edible oils as it competes for a share of the global vegetable oils market.
Palm surges on stronger soyoils, weak ringgit
The ringgit, palm’s currency of trade, gained 0.81% against the U.S. dollar during early trade on Wednesday, making the commodity more expensive for buyers holding foreign currencies.
World’s largest palm oil exporter Indonesia will raise its crude palm oil (CPO) export levy to 10% of its CPO reference price from 7.5% starting May 17, in order to finance the country’s increased biodiesel blending mandate.
Malaysia’s palm oil stocks jumped to a six-month peak in April as production surged to a decade-high for the month, while local consumption dropped, data from the industry regulator showed on Tuesday.
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