Palm oil edges higher on softer ringgit

JAKARTA: Malaysian palm oil futures inched higher on Monday after two straight sessions of losses, as a weaker ringgit made the vegetable oil cheaper for foreign currency holders.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 8 ringgit, or 0.2%, to 3,999 ringgit ($981.83) a metric ton by the midday break.

The contract dropped 2.42% last week.

“Bursa Malaysia CPO futures opened higher following gains in Chicago soyoil on Friday and in early Asian hours, coupled with a weaker ringgit and some glimpse of renewed demand from India this morning,” said Anilkumar Bagani, commodity research head at Sunvin Group, a Mumbai-based brokerage.

However, expectations of higher 2025-end Malaysian palm oil stocks capped the gains in prices, he said. Dalian’s most-active soyoil contract was unchanged, while its palm oil contract fell 1.14%. Soyoil prices on the Chicago Board of Trade were down 0.06% after early gains.

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

The ringgit, palm oil’s currency of trade, weakened 0.52% against the US dollar.

Asian stocks climbed and oil prices were choppy as investors considered the implications of US military action in Venezuela to prepare for a packed week of economic data releases in the first full trading week of the year.

Palm oil may test support at 3,964 ringgit per ton, a break below which could trigger a fall into the 3,894-3,937 ringgit range, Reuters technical analyst Wang Tao said.