KUALA LUMPUR: Malaysian palm oil futures were trading at a two-week high in early trade on Thursday boosted by a weaker ringgit, but a sharp decline in crude oil prices capped gains.
The ringgit, palm's currency of trade, weakened 0.1 percent against the dollar to 4.1400 around noon, making the vegetable oil cheaper for foreign buyers.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange had rose as much as 0.7 percent to 2,181 ringgit before paring some gains. It was last up 0.1 percent at 2,169 ringgit ($523.91) a tonne at the midday break.
Trading volumes stood at 15,043 lots of 25 tonnes each at noon. <1FCPO-TOT> "The market had risen tracking gains in the Chicago Board of Trade and Dalian Commodity Exchange, and a weak ringgit, but weak crude oil weighed," said a Kuala Lumpur-based trader, referring to gains in related edible oils on the two exchanges.
While palm could be supported by rising demand following India reducing its palm oil import taxes, the trader said export data was yet to reflect that as the new ruling had been implemented this week.
India, the world's largest importer of edible oils, said on Monday it would lower the duty on crude palm oil imports to 40 percent from 44 percent, while a tax on refined oils was cut to 50 percent from 54 percent.
Malaysian shipments of refined palm oil, however, will be taxed at 45 percent compared with 54 percent earlier.
Oil prices slipped on Thursday amid volatile currency and stock markets, and as analysts warned of an economic slowdown for 2019 amid rising crude supplies globally.
In other related oils, the Chicago March soybean oil contract rose 0.4 percent, while the January soybean oil contract on the Dalian Commodity Exchange jumped 1.8percent.
Meanwhile, the Dalian January palm oil contract gained 2.2 percent.Palm oil prices are impacted by changes in soy oil prices, as they compete for a share in the global vegetable oil market.
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