KUALA LUMPUR: Malaysian palm oil futures edged higher in early trade on Tuesday, extending gains into a third session, on a weaker ringgit and strength in related edible oils.
The ringgit was down 0.2 percent at 4.0830 per dollar, its weakest since Dec. 27, and has declined 0.9 percent so far this year.
Weakness in the ringgit, palm’s currency of trade, supports the vegetable oil by making it cheaper for holders of foreign currencies.
“The market is up on the weaker ringgit,” said a Singapore-based futures trader.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,211 ringgit ($541.51) a tonne at noon.
Trading volumes stood at 10,026 lots of 25 tonnes each.
Gains in related edible oils also supported the palm oil market, said another trader in Kuala Lumpur.
Palm oil prices are influenced by the performance of other edible oils, as they compete for a share in the global vegetable oils market.
The Chicago December soybean oil contract rose 0.6 percent, while the September soybean oil contract on China’s Dalian Commodity Exchange was up 0.6 percent.
US soyoil rose in line with a rebound in soybean prices after the US Department of Agriculture pegged the crop condition below market expectations.
Meanwhile, the Dalian September palm oil contract edged up 0.1 percent.
Source: Brecorder
