JAKARTA: Malaysian palm oil futures rebounded on Thursday, as traders sought bargains after prices hit a more than six-week low in the previous session, while a stronger ringgit and disappointing exports data weighed on sentiment.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose 0.48% to 3,771 ringgit ($888.76) per tonne by afternoon closing. The contract fell 3.57% on Wednesday, its biggest single-day drop since Dec. 12.
“Bargain-buying brought some life in mid-session,” a trader in Kuala Lumpur said, adding that a stronger ringgit had been “keeping big buyers at bay”.
The Malaysian ringgit, in which palm oil is traded, strengthened against the US dollar for a fifth consecutive session, hitting its highest level since April 2022.
A stronger ringgit makes palm oil less attractive for dollar holders.
Soyoil prices on the Chicago Board of Trade recovered earlier losses to trade 0.54% higher. The Dalian exchange is closed this week for the Lunar New Year celebration.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysian palm oil exports for Jan. 1-25 dropped 32.9% from the same period in December, inspection company AmSpec Agri Malaysia said on Wednesday, while cargo surveyor Intertek Testing Services reported a 34.7% decline.
Meanwhile, Indonesia’s 2022 exports of palm oil products declined by 8.5%, the Indonesia Palm Oil Association (GAPKI) said on Wednesday, amid sluggish production and higher domestic consumption.