KUALA LUMPUR: Malaysian palm oil futures fell from a more than one-month high in early trade on Monday, as it tracked losses on weaker related edible oils on China’s Dalian Commodity Exchange and on a stronger ringgit.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange dropped 0.7 percent to 2,577 ringgit ($646.68) a tonne at the midday break.
Trading volumes stood at 15,359 lots of 25 tonnes each.
Palm touched 2,615 ringgit a tonne on Friday, its highest since Dec. 4, after Malaysia said it would exempt crude palm oil export taxes for three months starting Jan. 8 to boost demand and lift prices.
“The market is down following Dalian and the stronger ringgit,” said a Kuala Lumpur based trader, referring to soyoil on China’s Dalian Commodity Exchange.
A stronger ringgit, the currency palm oil is traded in, typically makes the tropical oil more expensive for foreign buyers and weighs on demand. The ringgit strengthened to a 16-month high on Monday, and was last at 3.9880 per dollar around noon.
The market was also down ahead of the release of official data by the Malaysian Palm Oil Board, traders said. A Reuters poll showed that December end-stocks are forecast to have risen 5.1 percent to 2.69 million tonnes, its highest level in over two years.
Data for December will be released on Jan. 10 after 0430 GMT.
In other related edible oils, the March soybean oil contract on the Chicago Board of Trade fell 0.4 percent, while the May soybean oil on the Dalian Commodity Exchange was down 1.2 percent.
The Dalian January palm oil contract declined 1.2 percent.
Palm oil prices track the performance of other edible oils, as they compete for a share in the global vegetable oils market.