JAKARTA: Malaysian palm oil futures fell for a fourth straight day on Friday, weighed down by a stronger ringgit and concerns over slow exports.
A stronger ringgit (MYR=), palm’s currency of trade, makes the edible oil more expensive for foreign buyers and curbs demand. The ringgit climbed to 3.9360 to the US dollar late on Friday, its highest since May 2016.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange touched a low of 2,433 ringgit ($618.14) per tonne – the lowest since Dec. 22 – before ending down 1.25 percent at 2,445 ringgit ($621.19) at the close of trade.
Palm was down over 3 percent for the week, its second weekly decline.
Trading volumes stood at 39,494 lots of 25 tonnes each.
Traders said exports were slowing because of high stocks in China ahead of the key Chinese New Year festival in February.
“The market is worried about developments in the EU and watching closely on China,” said David Ng of Phillip Futures in Kuala Lumpur.
“Looks like the market is reacting towards a stronger ringgit,” he added.
Analysts said fears over changing import policies in the EU and India were also influencing the market.
European lawmakers this week approved a plan to ban the use of palm oil in motor fuels from 2021, raising fears in the industry of an overall decline in demand. A Malaysian minister on Thursday labelled the move a form of “crop apartheid”.
India last year raised import taxes on edible oils to the highest in a decade and traders were worried there could be another hike coming.
In other related oils, the March soybean oil contract on the Chicago Board of Trade rose slightly by 0.16 percent.
The May soybean oil on the Dalian Commodity Exchange
was down 0.49 percent, while the Dalian January palm oil contract was down 0.66 percent.
Source: Brecorder.com
