Palm tracks Dalian, Chicago rivals lower; firm currency weigh

JAKARTA: Malaysian palm oil futures fell on Thursday, weighed down by rival oil price weaknesses in Dalian and Chicago markets and sluggish exports, while a firm ringgit also added pressure.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange lost 48 ringgit, or 1.18%, to 4,005 ringgit ($1,031.68) a metric ton at closing.

“Today’s crude palm oil future is tracking Dalian weakness… the ringgit is also putting pressure on prices,” said a Kuala Lumpur-based trader.

Dalian’s most-active soyoil contract was down 0.1%, while its palm oil contract fell 1.51%. Soy oil prices on the Chicago Board of Trade lost 0.74%.

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

The Malaysian ringgit, the contract currency of trade, firmed 0.13% against the U.S. dollar, hovering around its strongest level since April 2018.

A stronger ringgit makes palm oil more expensive for foreign currency holders.

Exports of Malaysian palm oil products for February 1-25 fell 16.1% from a month earlier, according to independent inspection company AmSpec Agri Malaysia. Intertek Testing Services data showed a 12.1% drop.

Palm oil may break support at 4,036 ringgit per ton, and fall into a range of 3,999-4,012 ringgit, Reuters technical analyst Wang Tao said.