Malaysian palm oil futures edged up on Tuesday after the ringgit weakened to fresh 17-year lows, but remained not far off their 11-month troughs as recent data showed tepid demand for the edible oil, traders said. By the close on Tuesday, the benchmark palm oil contract for October on the Bursa Malaysia Derivatives Exchange had gained 0.54 percent to 2,040 ringgit ($515.15) a tonne. Traded volume stood at 39,928 lots of 25 tonnes each, above the roughly 35,000 lots usually traded daily.
The ringgit, which has been the worst performing emerging Asian currency so far in 2015, gave some support to the tropical oil as the benchmark palm is priced in the local currency, traders said. "Because of weak supply and demand we are just up marginally," said a trader with a foreign commodities brokerage in Kuala Lumpur. "The export figures didn't give much of a push." Data released on Monday showed a build-up in Malaysia's July palm oil stocks at 2.27 million tonnes due to higher production and a slowdown in demand after the Muslim holy month of Ramazan.
Cargo surveyor data, meanwhile, showed a spike in shipments from the world's second-largest producer in the first 10 days of August. "Demand is not firm," the trader said, referring to the impact the export numbers had on physical prices. Last week the benchmark palm oil contract marked its longest weekly losing streak in seven years, after sliding to its lowest since September on Thursday. Wang Tao, a Reuters market analyst for commodities technicals, said palm oil may retest a support at 2,017 ringgit per tonne, as indicated by its wave pattern and a Fibonacci projection analysis.