KUALA LUMPUR: Malaysian palm oil futures fell on weak export demand on Thursday, with a stronger ringgit also adding downward pressure on prices.
The February benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,298 ringgit ($529.37) a tonne at the end of the day.
"The market fell mainly due to a lack of demand interest and a weaker dollar," explained a trader based in Kuala Lumpur, adding that palm inventories still remain high.
The latest cargo surveyor export data, showing 2-4 percent gains for the first 15 days of November compared with a month before, did little to improve market sentiment.
Traders largely expect export demand to come down at the end of the month.
The ringgit strengthened against the dollar in trade on
Thursday, gaining 1.1 percent to reach 4.3410 at the end of the
day. A weaker ringgit normally lends support to palm, as it
makes the edible oil cheaper for holders of foreign currencies.
Palm oil stocks in Malaysia rose to a near 15-year high at
the end of October following a surprise rise in output, putting
downward pressure on benchmark prices.
Output in Indonesia, the world's largest producer, however
is seen dropping slightly in October from the previous month,
according to a Reuters survey, due to impacts of the haze. Its
crude palm oil exports are seen declining between 2-2.5 million
tonnes in 2016 from an estimated 24-25 million tonnes in 2015,
said Indonesia's national palm agency.
Traded volume stood at 37,929 lots of 25 tonnes each, above
the average 35,000 lots usually traded in a day.
Palm oil still targets 2,233 ringgit per tonne as support at
2,291 ringgit does seem to hold, said Wang Tao, a Reuters market
analyst for commodities and energy technicals.
In competing vegetable oil markets, the U.S. December soyoil
contract gained 0.4 percent, while the January soybean
oil contract on the Dalian Commodity Exchange lost 1
percent.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC5 2140 -28.00 2125 2145 1020
MY PALM OIL JAN6 2233 -15.00 2210 2244 5308
MY PALM OIL FEB6 2298 -20.00 2280 2307 19767
CHINA PALM OLEIN JAN6 4094 -52.00 4064 4174 912046
CHINA SOYOIL JAN6 5424 -56.00 5404 5494 534634
CBOT SOY OIL DEC5 27.54 -1.60 27.27 27.65 7215
INDIA PALM OIL NOV5 384.50 -1.60 383.70 385.80 370
INDIA SOYOIL NOV5 595.00 +0.50 593.80 595.80 270
NYMEX CRUDE DEC5 40.72 -0.03 40.61 41.05 5207
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 = 4.3410 ringgit)
($1 = 66.1600 Indian rupees)
($1 = 6.3825 Chinese yuan)
- Reuters
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