Malaysian palm oil price up on weak ringgit

KUALA LUMPUR: Malaysian palm oil rose 1.8 percent on Tuesday, snapping two sessions of decline as the ringgit weakened, although concerns over slowing global demand for the tropical product and higher production capped gains.
    The benchmark December palm oil contract on the Bursa Malaysia Derivatives Exchange closed 42 ringgit higher at 2,321 ringgit ($545) a tonne. It earlier fell to 2,260 ringgit, its lowest since Oct. 13, down from last week's two-week high of 2,386 ringgit.
    "The ringgit was the catalyst behind the surge ... However
demand is getting from bad to worse," said a trader based in
Kuala Lumpur. 
    He added that October production estimates from a local palm
oil miller association has shown higher production contrary to
seasonal trend of lower output.
    "If these patterns continue, the end stocks for October can
hit close to 2.9 to 3 million tonnes. This fear is already
creeping into the market."
    Traded volume stood at 38,886 lots of 25 tonnes each, above
the average 35,000 lots usually traded in a day.
    A weaker ringgit, the currency palm is traded in, usually
lends some support to palm oil prices as it makes the commodity
cheaper for overseas buyers holding other currencies.
    The ringgit lost 0.9 percent against the dollar on Tuesday,
weighed down by lower crude oil prices and an underperforming
local stock market.
    Data from cargo surveyors on Monday showed slowing export
demand for the vegetable oil, which fell between 8 and 9 percent
from Oct. 1-25 compared with the same time period a month ago.
  
    Palm oil is expected to fall to 2,235 ringgit per tonne as
it has broken support at 2,264 ringgit, according to Reuters
market analyst for commodities and energy technicals Wang Tao.
 
    In other vegetable oil markets, the U.S. December soyoil
contract was up 1.4 percent while the January soybean oil
contract on the Dalian Commodity Exchange closed
largely unchanged.
    
  Palm, soy and crude oil prices at 1005 GMT
                                                                                                          
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      NOV5    2247   +39.00    2195    2247     362
  MY PALM OIL      DEC5    2279   +38.00    2222    2289    3789
  MY PALM OIL      JAN6    2321   +42.00    2260    2331   24116
  CHINA PALM OLEIN JAN6    4450   -34.00    4388    4460 1224086
  CHINA SOYOIL     JAN6    5574    +2.00    5484    5580  741450
  CBOT SOY OIL     DEC5   28.17    +2.00   27.74   28.19   10318
  INDIA PALM OIL   OCT5  406.80    +2.00  404.10  406.90     539
  INDIA SOYOIL     NOV5  621.85    +1.35  616.40  623.50   57895
  NYMEX CRUDE      DEC5   43.59    -0.39   43.33   43.91   34008
                                                                                                          
  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 = 4.26 ringgit)
 ($1 = 64.965 Indian rupees)
 ($1 = 6.3517 Chinese yuan)
- Reuters