Malaysian palm oil futures rose to their highest in a week on Wednesday as the ringgit dipped, making the ringgit-denominated palm feedstock cheaper for overseas customers. The September palm oil contract on the Bursa Malaysia Derivatives exchange had inched up 2.2 percent to 2,271 ringgit ($605.68) a tonne by Wednesday's close, with prices touching 2,274 ringgit, their highest since June 17.
Total volume was 42,190 lots of 25 tonnes each, above the average 35,000 lots. Investors are also hunting for clues on the strength of demand for the tropical oil and on output in the world's No 2 grower, Malaysia. "We're waiting for new leads from fundamentals that can take the market away from this sideways trading," the trader added. "At the moment the range and trade volumes are getting narrower."
Cargo surveyors will release export data for Malaysian palm shipments between June 1-25 on Thursday. Exports in the first 20 days of the month were little changed from a month before as key buyers India and China scaled back purchases. Malaysia is on track to raise its biodiesel mandate to B10 in October from the current B7, Plantations Industries and Commodities Minister Douglas Uggah Embas said on Wednesday.
Market players also watched for possible changes to regulations in the world's top palm producer, Indonesia, after the head of the public body that will manage the funds from a new levy said it might review some of the charges. The regulation, due to take effect from July 1, requires exporters in Indonesia to pay a tax of $50 per tonne of crude palm oil and $30 for processed palm oil product shipments. In other vegetable oil markets, the US July soyoil contract was up 0.9 percent in late Asian trade, while the most active January soybean oil contract on the Dalian Commodity Exchange was flat.