KUALA LUMPUR (April 12): Malaysian palm oil futures rose on Friday, as weakness in the ringgit helped it to reverse some losses after hitting a one-week low in the previous session.
The ringgit, which has been weakening since April 3, fell to its lowest since Jan 25. A weaker ringgit, the currency in which the futures are traded, makes the commodity more attractive to buyers holding foreign notes.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.4% at 2,162 ringgit (US$525.78) a tonne.
The market dropped as much as 2% on Wednesday, as official data showed March end-stocks and production at higher levels than expected.
Palm fell 2.8% this week.
"The market is bottoming out from the support level of 2,148 to 2,150 ringgit per tonne, with supportive weakness in the ringgit," one Kuala Lumpur-based trader said.
Traders said the market had anticipated a favourable government announcement, after local media reported on Monday that negotiations on a China-backed rail project could include a palm oil export deal for Malaysia.
No announcement came but the softer ringgit continued to hold up market sentiment, the traders said.
In related oils, the Chicago May soybean oil contract firmed by 0.3%. The May soyoil contract on the Dalian Commodity Exchange eased by 0.1%, while the Dalian May palm oil contract rose 0.3%.
Palm oil prices are affected by movements in soyoil, with which it competes in the global vegetable oil market.
Palm, soy and crude oil prices at 1039 GMT
|MY PALM OIL||APR9||2090||+50.00||2090||2090||10|
|MY PALM OIL||MAY9||2115||+4.00||2107||2127||872|
|MY PALM OIL||JUN9||2166||+12.00||2150||2177||19170|
|CHINA PALM OLEIN||MAY9||4468||+12.00||4442||4484||102970|
|CBOT SOY OIL||MAY9||29.04||+0.06||28.9||29.07||3975|
|INDIA PALM OIL||APR9||535.40||+0.80||534.90||539.3||317|
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
(US$1 = 4.1120 ringgit)
(US$1 = 6.7082 Chinese yuan)
(US$1 = 69.2100 Indian rupees)