KUALA LUMPUR: Malaysian palm oil futures inched up on Tuesday, recovering from a four-month low hit in the previous session, as a weaker ringgit, which makes the tropical oil cheaper for foreign buyers and aids demand, lent support.
The ringgit, the currency palm oil is traded in, was down 0.1 percent, not far one-year highs hit on Thursday.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 0.2 percent to 2,595 ringgit ($630.47) a tonne at the midday break, on track for a third session of gains in six.
Traded volumes stood at 11,865 lots of 25 tonnes each at noon.
Palm prices hit a low of 2,565 ringgit on Monday afternoon, its weakest level since July 25.
“The market is reacting to a weaker ringgit,” said one futures trader from Kuala Lumpur.
Palm prices were correcting after the sharp decline on Monday, another trader said.
“But, I don’t think gains will sustain as demand is still quite slow,” he said.
Palm oil exports from Malaysia fell 8.4-8.6 percent during Nov. 1-25 versus the corresponding period last month, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance.
In other related edible oils, the December soybean oil contract on the Chicago Board of Trade rose 0.2 percent, while the January soybean oil contract on the Dalian Commodity Exchange was down 0.2 percent.
Dalian’s January palm olein contract dropped 0.2 percent.
Palm oil is impacted by movements in other edible oils as they compete for a share of the global vegetable oils market.
Palm oil still targets a range of 2,519-2,555 ringgit per tonne, said Reuters’ market analyst for commodities and energy technicals Wang Tao.
Source: Brecorder.com
