Malaysian palm oil futures ended lower on Thursday and snapped two sessions of gains after hitting a 20-month high earlier in the session, on the back of a stronger ringgit and weaker export demand. The palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose as much as 0.82 percent to 2,568 ringgit a tonne, its highest since May 19, 2014, before settling down 0.6 percent 2,531 ringgit ($610.62) per tonne.
Traded volume stood at 48,968 lots of 25 tonnes each. "The ringgit is firmer, and there are expectations of a bumper crop in Brazil," said a trader from Kuala Lumpur, referring to soybean output in the South American country. An oversupply of soybeans from South America would send soyoil prices lower, narrowing its spread with palm oil. A discount would help soyoil grab market share from palm oil in top consumers China and India, who favour importing soybeans to crush for domestic consumption.
Exports of palm oil products have been falling, with cargo surveyor data showing an almost 10 percent drop in January shipments from Malaysia compared with the previous month. The ringgit rebounded 1.8 percent to 4.1450 against the dollar. A stronger ringgit makes palm oil costlier for holders of foreign currencies. In competing vegetable oil markets, the US March soyoil contract gained 0.6 percent, while the May soybean oil contract on the Dalian Commodity Exchange rose 0.9 percent.
Comments
Comments are closed.