KUALA LUMPUR /JAKARTA: Malaysian palm oil futures regained earlier losses and ended the afternoon trade higher on Wednesday to track a rebound in US soy oil and helped by a weaker ringgit.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange rose 0.98% to 3,824 ringgit ($858.17) per tonne by the end of the afternoon session.
The contract fell as much as 3.14% earlier on Wednesday, but was lifted by a rebound in soyoil prices on the Chicago Board of Trade, which rose 2.26% by 1019 GMT, and a weaker ringgit, a trader in Kuala Lumpur said.
Malaysian ringgit on Wednesday touched its weakest level since March 2017, Refinitiv data showed, as most Asian currencies weakened ahead of a key US Federal Reserve decision that could determine the path of policy tightening for the region’s central banks.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market, while weaker ringgit makes palm oil more attracted for buyers using foreign currency.
On the Dalian exchange, its most-active soyoil contract rose 0.11%, while its palm oil contract slipped 1.99%.
Meanwhile, palm oil prices will weaken further in the short term due to signs of demand destruction and “distress selling” by top producer Indonesia, commodities consultancy LMC International forecast on Tuesday.
Palm oil remains neutral in a range of 3,598 ringgit to 3,857 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.