KUALA LUMPUR: 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.
The ringgit fell as much as 0.6 percent to 3.7590 against the dollar, its weakest since
June 15.
"The ringgit is slightly weaker. Generally, that's giving some kind of support to the market," said a trader with a foreign commodities brokerage in Kuala Lumpur.
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.
"We are in the final stages of discussion with the stakeholders," he said, adding that he hoped the discussions will iron out the final details by the end of the month.
The proposal to increase the blend to 10 percent palm biodiesel initially was opposed by several carmakers including BMW Malaysia.
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.
"The industry gave a recommendation that the CPO levy has to be reviewed periodically," Bayu
Krisnamurthi, president-director of Indonesia's crude palm oil Public Service Agency, told Reuters.
"The implementation of this policy has to be aware of the market dynamics that is always
changing, including reactions from both competitors and consumers."
In other vegetable oil markets, the U.S. 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.
Palm, soy and crude oil prices at 1051 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL5 2260 +48.00 2215 2263 692
MY PALM OIL AUG5 2271 +49.00 2224 2271 4000
MY PALM OIL SEP5 2271 +49.00 2227 2274 21636
CHINA PALM OLEIN JAN6 5140 +30.00 5048 5150 741480
CHINA SOYOIL JAN6 5876 -2.00 5820 5902 509568
CBOT SOY OIL JUL5 33.13 +2.50 32.72 33.19 6815
INDIA PALM OIL JUN5 450.50 +2.50 447.60 451.00 869
INDIA SOYOIL AUG5 583.60 +2.90 578.10 584.80 46310
NYMEX CRUDE AUG5 61.08 +0.07 60.93 61.57 28396
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 = 3.7495 ringgit)
($1 = 6.2071 Chinese yuan)
($1 = 63.62 Indian rupees)
- Reuters
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