KUALA LUMPUR: Malaysian palm oil futures fell from a one-week high on Monday evening, weighed down by a stronger ringgit, which makes the tropical oil more expensive for holders of foreign currencies.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 0.6 percent at 2,588 ringgit ($637.44) a tonne at the end of trading, a fourth day of losses out of five.
Earlier in the session, the contract hit its strongest level since Nov. 24 at 2,625 ringgit.
Traded volumes stood at 34,067 lots of 25 tonnes each on Monday evening.
“The ringgit was too strong this evening,” said a futures trader from Kuala Lumpur, explaining why the market had fallen from a one-week top.
The ringgit, palm’s currency of trade, was trading at over one-year highs on Monday evening, and closed 0.7 percent higher at 4.060 against the dollar.
The market was up earlier in the day, tracking gains in related edible oils and on concerns that floods on the east coast of Peninsular Malaysia could hit production, traders said.
Year-end monsoon rains which lead to floods could hit palm oil production in the short term by disrupting the harvest.
Production in Malaysia, the world’s second largest producer after Indonesia, could see a monthly decline in November after industry regulator data showed output hit the 2 million tonne mark in October, up 12.9 percent on the previous month.
Palm oil is also impacted by movements in other edible oils as they compete for a share of the global vegetable oils market.
The January soybean oil contract on the Chicago Board of Trade was up 0.2 percent, while the January soybean oil contract on the Dalian Commodity Exchange rose 0.1 percent.
In other related edible oils, Dalian’s January palm olein contract rose 0.7 percent.
Source: Brecorder.com
