Netizen 24 MYS: Malaysian palm oil price oil price up nearly 1% on weaker ringgit, short-covering

By On February 05, 2018

Malaysian palm oil price oil price up nearly 1% on weaker ringgit, short-covering

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.9 percent at 2,489 ringgit ($638.53) a tonne at the end of the trading day.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.9 percent at 2,489 ringgit ($638.53) a tonne at the end of the trading day.

KUALA LUMPUR: Malaysian palm oil futures rose late on Monday, charting their first session of gains in three, as the ringgit weakened and traders covered short positions.

Weakness in the ringgit, in which palm o il is traded, makes the vegetable oil cheaper for holders of foreign currencies.

The ringgit was down 0.3 percent at 3.8980 per dollar on Monday's close of trade, after having gained more than 3 percent since the start of the year.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.9 percent at 2,489 ringgit ($638.53) a tonne at the end of the trading day.

It earlier rose as much as 1.2 percent when it hit its intraday high of 2,496 ringgit.

Trading volumes stood at 50,664 lots of 25 tonnes each in a day.

"The market is projecting a weaker ringgit," said a futures trader from Kuala Lumpur.

Palm was supported by short-covering and forecasts of lower output, said another trader.

Palm oil prices declined 0.4 percent in January due to a stronger ringgit and weak demand.

Malaysia's palm oil shipments in January fell 8-9 percent from a month earlier, according to data from two cargo surveyors.

Palm oil output, however, is expected to decline in the first quarter of the year in line with seasonal trends, reducing market supply and lending support to prices.

A Reuters poll forecast that January production will fall 14.9 percent to 1.56 million tonnes, its lowest in seven months and the sharpest monthly drop in two years.

The poll also forecast that end-stocks would rise 0.6 percent to 2.75 million tonnes, while exports are forecast to fall 8 percent from December to 1.31 million tonnes.

In other related edible oils, the March soybean oil contract on the Chicago Board of Trade was up 0.4 percent, while the May soybean oil on the Dalian Commodity Exchange dropped up to 1 percent.

In other related edible oils, the Dalian May palm oil contract fell 0.4 percent. - Reuters

Related NewsSource: Google News

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