Malaysian palm oil price slides on stronger ringgit, technical selling

Malaysian palm oil futures fell from a one-week high on Monday evening, weighed down by a stronger ringgit MYR=, which makes the tropical oil more expensive for holders of foreign currencies

KUALA LUMPUR: Malaysian palm oil futures fell on Wednesday evening, easing from gains made earlier in the day, as it fell on a stronger ringgit, its currency of trade.

A stronger ringgit typically makes palm oil more expensive for holders of foreign currencies. It closed on Wednesday evening 0.2 percent stronger against the dollar at 4.0710 and is currently trading at around 14-month lows.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,499 ringgit ($613.85) a tonne at the close of trade.

Trading volumes stood at 41,112 lots of 25 tonnes each at the end of the trading day.

"The ringgit played a role today in the weakening of the market," said a Kuala Lumpur-based futures trader, while another trader added that the market also fell on technical selling, "as it couldn't hold above 2,520 ringgit."

The market was earlier up as expectations of lower production in December and easing weakness in export demand supported the market.

"This month, production will be down, but the question is how much," said a Kuala Lumpur-based trader earlier in the day.

Malaysian palm oil shipments fell 2 percent on Dec. 1-20 compared with the same period last month, data from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed.

The fall compares with a steep 16-22 percent decline seen in the first ten days of December, against the same period in November.

"I think full-month exports for December can be positive,"  another trader said.

In other related edible oils, the January soybean oil contract on the Chicago Board of Trade rose 0.3 percent, while the May soybean oil contract on the Dalian Commodity Exchange was down 0.2  percent.

The Dalian January palm olein contract was up 0.3 percent.

Palm oil prices are impacted by movements in other edible oils, as they compete for a share of the global vegetable oils market. - Reuters