Malaysian palm oil futures recovered from a one-week low on Thursday and ended trading higher on the back of bargain-buying and a weaker ringgit , its currency of trade. Gains in the Chicago Board of Trade soyaoil also lent support to the market, said traders. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 0.8 percent at 2,432 ringgit ($613.06) a tonne at the close of trade. Earlier in the session, it hit the lowest since May 8 at 2,399 ringgit.
Trading volume stood at 45,537 lots of 25 tonnes each at the on Thursday evening. "A weaker ringgit is seen supporting the market," said a Kuala Lumpur based trader, as a weaker ringgit typically makes palm oil cheaper for holders of foreign currencies. The ringgit fell 0.1 percent on Thursday evening to 3.9670 per dollar. It has lost 0.5 percent since the start of the week.
Traders said the market rose earlier on bargain hunting gains in US soyaoil but lacked bullish news for long-term support. "We're seeing some bargain-hunting, but it seems like the market has no supportive news to push it higher," said a futures trader in Kuala Lumpur. Demand for Malaysian palm oil has waned in recent weeks, according to export data from industry players.
Exports in the first half of May fell 13.7 percent-14.9 percent from a month earlier, showed data from inspection company AmSpec Agri Malaysia and cargo surveyor Societe Generale de Surveillance. The demand slowdown could be attributed to Malaysia's resumption of a crude palm oil export tax, which was set at 5 percent for May following four months of suspension, said traders. In related oils, the Chicago July soyabean oil contract was up 0.5 percent on Thursday. Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.