JAKARTA: Palm oil futures in Malaysia rose from a more than three-year low on Wednesday, helped by a weaker ringgit, but soft demand and high inventory levels kept prices under pressure.
Palm touched its lowest since August, 2015 a day earlier, falling a total of 4.4 percent over three consecutive sessions to Tuesday.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was up 0.5 percent at 1,975 ringgit ($471.02) per tonne by the midday break on Wednesday.
Traded volumes stood at 12,725 lots of 25 tonnes each by midday.
Palm prices has dropped "too much, too fast" recently, a trader in Kuala Lumpur said, and were bound for some respite. "Ringgit is weaker, so it is providing some support," the trader said. Palm futures are traded in ringgit, and weakness in
the currency make them cheaper for international buyers.
The ringgit edged lower for a second day on Wednesday, trading near its weakest in over a year against the dollar.
However, the trader said palm is likely to struggle to maintain postive momentum, given high inventory levels in Malaysia due to high production and weak demand.
"The market needs to see real demand before we can expect recovery in prices," the trader said, adding high inventory will continue to put pressure on prices in short term.
In related oils, the Chicago soybean oil contract for December rose 0.3 percent, while the January soybean oil contract on the Dalian Commodity Exchange traded 0.4 percent lower.
The Dalian January palm oil contract was 0.4 percent higher.
Palm oil prices are affected by movements in other edible oils as they compete for a share of the global vegetable oils market. - Reuters