KUALA LUMPUR: Malaysian palm oil futures inched down on Tuesday as investors booked profits ahead of key industry data on monthly inventories and output in the No.2 producer, with prices facing pressure as the ringgit clawed back gains from nine-year lows.
After hitting its lowest since January 2006 on Monday, the ringgit nudged up 0.5 pct to 3.7470 per U.S. dollar, pulling the plug on palm's rally that had lifted benchmark prices to their highest in over three months.
"When the market rallied up, one of the main things behind it was the ringgit," said a
trader with a local commodities brokerage.
Some market players are also squaring positions ahead of an upcoming monthly report on
Malaysia's palm end-stocks, output and exports by industry regulator the Malaysian Palm
Oil Board due Wednesday.
"There is profit-taking ahead of the MPOB report tomorrow ... people are squaring
positions," the Malaysia-based trader added.
Market estimates show that Malaysian palm oil stocks likely eased to 2.14 million
tonnes in May, with exports of the tropical oil surging nearly 40 percent in their biggest
monthly rise in 8-1/2 years.
The Malaysisan Palm Oil Association, a growers' group, estimates that output for the
month rose 5.3 percent to 1.78 million tonnes.
The August palm oil contract on the Bursa Malaysia Derivatives exchange had
lost 0.7 percent to 2,317 ringgit ($618.36) a tonne by Tuesday's close, falling off a
three-month peak of 2,362 ringgit hit in the previous session.
Total traded volume stood at 44,541 lots of 25 tonnes each, higher than the usual
35,000 lots.
Meanwhile, Indonesia's finance minister Bambang Brodjonegoro said the public service
agency to collect and manage crude palm oil levies can be set up after regulations are
finalised this week, propelling the top palm producer a step closer to funding an
ambitious biodiesel programme.
"The levy will be implemented after the BLU (Public Service Agency) is established and
board of directors is chosen," he said in Jakarta late Monday.
Neighbouring Malaysia plans to raise its biodiesel mandate to 10 percent by October
this year from 7 percent currently, its plantation industries and commodities minister
said on Monday.
Oil prices gained on Tuesday, recouping some of the previous session's losses, as
higher seasonal demand in developed economies offset the impact of a large global supply
overhang.
In other markets, the U.S. July soyoil contract was flat in late Asian trade,
while the most active September soybean oil contract on the Dalian Commodity
Exchange fell 1.4 percent.
Palm, soy and crude oil prices at 1022 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN5 2323 +3.00 2300 2323 7
MY PALM OIL JUL5 2314 -19.00 2288 2314 2231
MY PALM OIL AUG5 2317 -16.00 2289 2318 22382
CHINA PALM OLEIN JAN6 5258 -110.00 5200 5354 988742
CHINA SOYOIL SEP5 5722 -82.00 5694 5792 544706
CBOT SOY OIL JUL5 34.11 -0.50 34.00 34.18 7205
INDIA PALM OIL JUN5 458.00 -0.50 455.10 458.50 810
INDIA SOYOIL JUN5 610.50 +1.50 605.50 611.30 8640
NYMEX CRUDE JUL5 58.86 +0.72 58.23 58.97 28585
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 = 3.7470 ringgit)
($1 = 6.2057 Chinese yuan)
($1 = 63.90 Indian rupees)
- Reuters
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