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Friday, January 27, 2023

Palm drops over 4pc this week amid strong ringgit

JAKARTA: Malaysian palm oil futures notched weekly losses of more than 4% after falling for a second session on Friday as the ringgit strengthened and related vegetable oils slumped.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 2.94% to end the day at 3,958 ringgit ($903.03) per tonne, its lowest close since Nov. 22.

For the week, it was down 4.40%.

Persisting strength in the ringgit and continued weakness in related oilseeds put pressure on palm oil prices, a Kuala Lumpur-based trader said.

The ringgit rose for a third day against the US dollar, touching its best level since late-May earlier on Friday. A stronger ringgit makes palm oil less attractive for holders of foreign currencies.

Soyoil prices on the Chicago Board of Trade were down 3.56% on Friday, extending a 6.26% drop from a day earlier, its biggest daily decline since July.

The US government proposed smaller-than-expected biofuels blending requirements. Soyoil can be used for biofuel blending.

Dalian’s most active soyoil contract fell 2.61%, while its palm oil contract slumped by 3.18%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Meanwhile, sunflower oil’s discount to rival soyoil has widened this week to the highest level in more than 9 months as leading exporters Ukraine and Russia aggressively tried to reduce their stocks, industry officials told Reuters.

Palm drops over 4pc this week amid strong ringgit

Source: Brecorder

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