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Malaysian palm oil price hits 10-month low on stronger ringgit, rising output
KUALA LUMPUR: Malaysian palm oil futures hit a 10-month low in the second half of trade on Tuesday on the back of a stronger ringgit, while expectations of rising output and weaker export growth also weighed on the market.
The ringgit, palm oil’s currency of trade, gained 0.1 percent to 4.2610 per dollar around on Tuesday evening. It earlier reached 4.2570, its strongest in a week. A firmer ringgit typically makes palm oil more expensive for holders of foreign currencies.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 1 percent at 2,432 ringgit ($570.76) a tonne at the close. It hit an intraday low of 2,425 ringgit, its lowest since Aug. 8.
Traded volumes stood at 57,616 lots of 25 tonnes.
“People are not optimistic about forward production… Exports are not looking too spectacular. After Ramadan it should slow down,” said a Kuala Lumpur-based trader.
Data from industry regulator the Malaysian Palm Oil Board showed May end-stocks falling 2.6 percent from the previous month to 1.56 million tonnes, while production rose 6.9 percent to 1.65 million tonnes.
Exports saw a 17.3 percent surge in shipments to 1.51 million tonnes.
Malaysian palm oil shipments in the first 10 days of June grew at a smaller rate, 5.8 percent, versus the corresponding period last month according to cargo surveyor Intertek Testing Services, and 2.2 percent based on Societe Generale de Surveillance data.
In related oils, soybean oil on the Chicago Board of Trade was down 0.3 percent, while the September soybean oil contract on the Dalian Commodity Exchange dipped 0.1 percent.
The September contract for palm olein was down 0.2 percent.
Palm oil prices are typically impacted by the movements of soyoil, as both the vegetable oils compete for a share in the global edible oils market. – Reuters
Source: http://www.thestar.com.my/business/business-news/2017/06/14/palm-hits-10-month-low-on-stronger-ringgit-rising-output/#J1PsfRCyo52DofB5.99