Palm falls for second session on weak Chicago soyoil, firmer ringgit

KUALA LUMPUR: Malaysian palm oil futures edged lower for a second straight session on Thursday, as weaker Chicago soyoil, a stronger ringgit and expectations of a higher output in April weighed.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid 41 ringgit, or 0.9%, to 4,538 ringgit ($1,161.50) a metric ton at the close.

Crude palm oil prices traded lower following a long liquidation in Chicago soyoil, said Anilkumar Bagani, commodity research head at Sunvin Group, a Mumbai-based brokerage.

“A stronger Malaysian ringgit, higher production in April and palm oil narrowing its discount over gas oil also pressured prices,” he said, adding that the sharp fall in crude oil futures on Wednesday night also contributed to the decline.

A Reuters survey last Monday showed that Malaysia’s palm oil inventories and exports likely fell in April, while production was expected to have surged.

The Malaysian Palm Oil Board is expected to release its monthly supply and demand data on May 11.

Dalian’s most-active soyoil contract fell 1.08%, while its palm oil contract shed 1.51%. Soyoil prices on the Chicago Board of Trade were down 0.56%.

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

The ringgit, palm’s currency of trade, strengthened 0.33% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Malaysian palm oil prices are likely to rise about 12% to 5,200 ringgit ($1,316) a ton by mid-July, as higher energy prices from the U.S.-Israeli war on Iran boost biodiesel demand and tighten supplies, analyst Dorab Mistry said.