JAKARTA: Malaysian palm oil futures rallied to a two-week high on Thursday as traders took advantage of a falling ringgit, supported by gains in competing markets and signs that the El Nino weather phenomenon could already be hurting output in East Malaysia.
The August contract on the Bursa Malaysia
Derivatives exchange was up 1.4 percent at 2,206 ringgit
($605.88) a tonne by Thursday's close. Prices earlier touched
2,219 ringgit, their highest since May 13.
Total traded volume stood at 43,601 lots of 25 tonnes each,
well above the average 35,000 lots traded by close.
Benchmark palm prices have pulled up from more than
three-week lows this week, following a surge in the Chinese and
U.S. soy markets, with robust export demand so far in May also
fuelling the rise.
The ringgit had slipped around 0.17 percent to
3.641 per dollar by 1142 GMT, and has shed around 1.65 percent
this week. A weaker ringgit makes palm cheaper for overseas
customers.
Gains on Thursday were also supported by early signs that a
strong El Nino weather pattern may be reducing output from the
world's No. 2 palm oil producer, traders said.
Such a pattern results in below-average rainfall in top palm
producers Indonesia and Malaysia.
"The weather in East Malaysia is unusually hot and dry," a
trader at a local commodities brokerage told Reuters on
Thursday, adding that the dry conditions were expected to
continue in June. "Yields are already plunging in the states of
Sabah and Sarawak."
The El Nino weather phenomenon predicted by meteorologists
could push depressed palm oil prices as high as $700 a tonne
this year, an industry group in top producer Indonesia said last
week, although it said production was unlikely to be impacted
until early 2016.
The U.S. July soyoil contract gained 0.95 percent in
late Asian trade, while the most active September palm oil
contract on the Dalian Commodity Exchange was up 0.83
percent.
In other markets, crude oil prices recovered on Thursday
after a two-day slide as the dollar weakened, making fuel less
expensive for holders of other currencies.
Palm, soy and crude oil prices at 1144 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN5 2154 +25.00 2153 2175 248
MY PALM OIL JUL5 2208 +30.00 2190 2217 5168
MY PALM OIL AUG5 2206 +30.00 2190 2219 22760
CHINA PALM OLEIN SEP5 0 +0.00 0 0 0
CHINA SOYOIL SEP5 0 +0.00 0 0 0
CBOT SOY OIL JUL5 32.03 +1.60 31.67 32.07 12636
INDIA PALM OIL MAY5 457.00 +1.60 456.60 458.00 206
INDIA SOYOIL JUN5 599.00 +1.45 598.50 602.90 27285
NYMEX CRUDE JUL5 57.52 +0.01 57.32 58.04 37103
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.6410 ringgit)
($1 = 6.2002 Chinese yuan)
($1 = 63.8000 Indian rupees)- Reuters
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