Malaysian palm oil futures rose for a second straight session, and marked their strongest daily gain in two weeks, on Wednesday on the back of a weaker ringgit. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed 1.5 percent higher at 2,205 ringgit a tonne.
It had reached a one-week high of 2,219 ringgit earlier in the day. "The continuous depreciation of the local currency is likely to have palm prices climbing," said a futures trader based in Kuala Lumpur, as the ringgit is palm's traded currency.
A weaker ringgit would make palm oil cheaper for foreign buyers. Malaysia's currency depreciated against the dollar and weakened as much as 0.3 percent on Wednesday before paring some losses. It was last down 0.1 percent at 4.1330 in the evening. Another trader said slower-than-expected output growth added more support to palm prices later in the day.
In related oils, the Chicago May soyabean oil contract gained 0.5 percent, and the May soyaoil contract on the Dalian Commodity Exchange was up 0.3 percent. Meanwhile, the Dalian May palm oil contract rose 0.6 percent. Palm oil prices are affected by movements in soyaoil, as they compete for a share of the global vegetable oils market.
Comments
Comments are closed.