Palm extends losses on weak crude, firm ringgit, sluggish exports

KUALA LUMPUR: Malaysian palm oil futures extended losses for a second straight session on Monday, as a firmer ringgit, softer crude oil prices and sluggish exports dampened sentiment.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 41 ringgit, or 0.84%, to 4,857 ringgit ($1,191.90) a metric ton at the close. The contract fell 0.77% in the previous session.

The market was pressured by lower oil prices and a stronger ringgit, while Friday’s decline in open interest also reflected subdued market participation, a Kuala Lumpur-based trader said.

Oil prices slid to their lowest in 11 days as investors hoped for diplomatic progress on the Iran war and eyed a partial recovery in shipments from Saudi Arabia.

Weaker crude makes palm a less-attractive option for biodiesel feedstock.

Cargo surveyors estimated that exports of Malaysian palm oil products for September 1 to 20 fell between 12.8% and 24.7% from a month earlier.

Dalian’s most-active soyoil contract fell 0.11%, while its palm oil contract shed 0.92%. Soyoil prices on the Chicago Board of Trade were down 0.45%.

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 0.02% against the dollar, making the commodity slightly expensive for buyers holding foreign currencies.