Palm oil drops on Dalian weakness, stronger ringgit

JAKARTA: Malaysian palm oil futures closed lower on Monday, tracking weakness in Dalian edible oils and also pressured by a stronger ringgit.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange declined 12 ringgit, or 0.3%, to 4,006 ringgit ($979.46) a metric ton at the close.

“The futures were still trading in range between 4,000 to 4,100 ringgit, tracking Dalian weakness and ringgit strengh,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract dropped 0.95%, while its palm oil contract was down 0.96%. Soyoil prices on the Chicago Board of Trade was up 0.12%.

Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

The Malaysian ringgit, palm’s currency of trade, slightly strengthened 0.07% against the U.S. dollar, making the commodity a bit more expensive for foreign currency holders.

Exports of Malaysian palm oil products for December 1-15 fell 16.4% from a month earlier, independent inspection company AmSpec Agri Malaysia said. According to Intertek Testing Services, exports fell 15.9% for the same period.

India’s palm oil imports edged up in November as refiners took advantage of lower prices, boosting purchases of the tropical oil while reducing imports of the costlier soyoil and sunflower oil, a leading industry body said on Monday.

Oil prices climbed on Monday as supply disruptions linked to escalating U.S.-Venezuela tensions outweighed oversupply worries and the impact of a potential Russia-Ukraine peace deal.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.