JAKARTA: Malaysian palm oil futures dropped for the second consecutive session on Monday to their lowest closing levels in nearly two months, pressured by weakness in rival vegetable oils, while a weak currency limited losses.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange lost 1.6% to 4,305 ringgit ($971.78) a metric ton at closing, its lowest closing price since Jan. 31.
“The contract is following weak external markets but the ringgit’s weakness cushioned some losses,” said a Kuala Lumpur-based trader. Dalian’s most-active soyoil contract dropped 1.02%, while its palm oil contract shed 1.1%. Soyoil prices on the Chicago Board of Trade (CBOT) barely changed, up 0.02%.
Palm oil tracks prices of rival edible oils as it competes for a share of the global vegetable oils market. Malaysian ringgit, the contract’s currency of trade, weakened 0.25% against the US dollar. A soft ringgit makes palm more attractive to foreign currency holders. Exports of Malaysian palm oil products in the March 1-20 period are estimated to have dropped between 5% and 14.2% month-on-month, according to cargo surveyors.
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