Palm oil tracks Dalian rivals higher, stronger ringgit caps gains

JAKARTA: Malaysian palm oil futures edged higher on Wednesday after two straight sessions of falls, as gains in Dalian vegetable oils outweighed pressure from a stronger ringgit and weakness in Chicago soyoil.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 5 ringgit, or 0.12%, to 4,220 ringgit ($1,075.16) a metric ton by the midday break.

“Crude palm oil future is tracking Dalian movement, while waiting for fresh leads from next week’s Palm Oil Conference,” said a Kuala Lumpur-based trader. Dalian’s most-active soyoil contract gained 0.25%, while its palm oil contract rose 0.33%.

Soyoil prices on the Chicago Board of Trade were down 0.18%. 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 oil’s currency of trade, strengthened 0.13% against the US dollar, making palm oil more expensive for foreign currency holders.

Exports of Malaysian palm oil products were expected to have risen between 14.9% and 17.9% month-on-month in January, according to data from inspection company AmSpec Agri Malaysia and cargo surveyor Intertek Testing Services.

India’s palm oil imports surged 51% in January to a four-month high, as the tropical oil’s discount to rival soyoil prompted refiners to ramp up purchases while cutting soyoil imports to a 19-month low, according to five dealers.

Palm oil may test support at 4,201 ringgit per ton, a break below which may trigger a fall into the 4,115 ringgit to 4,158 ringgit range.