Malaysian palm oil price snaps 5-session rally on stronger ringgit

• Oct 22, 2019

SINGAPORE: Malaysian palm oil futures closed slightly lower on Monday as the ringgit crept higher, though gains in rival oils minimised losses.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange ended 0.04% lower to 2,286 ringgit ($546.89) per tonne.

Dalian’s January palm oil contract was last up 1.5%, while the January soyoil contract was 0.7% higher.

Elsewhere, U.S. soyoil futures on the Chicago Board of Trade were up 0.1%.

Palm oil is affected by price movements in related oils as they compete for share in the global vegetable oils market.

Palm rose as much as 2,309 ringgit during the session due to gains in rival oils, the highest since Aug. 26.

The gains were limited by a stronger ringgit, which strengthened 0.1% against the dollar, making the edible oil more expensive for holders of foreign currencies.

Malaysian Prime Minister Mahathir Mohamad said on Monday his exports-reliant country could be hit with trade sanctions, also contributing to limiting palm’s gains.

Mahathir did not mention the sanctions’ source but complained of being bullied by powerful nations, referring to a campaign by European countries against palm oil.

There are also concerns that India, the biggest buyer of Malaysian palm oil, would restrict imports of the product due to a diplomatic row over comments made by Mahathir on New Delhi’s recent actions in the disputed South Asian region of Kashmir.

Palm oil may test a resistance at 2,317 ringgit per tonne, a break above which could lead to a gain to 2,364 ringgit, said Reuters analyst Wang Tao.

“The market is not reacting so strongly to Mahathir’s comments, but maybe that’s why it’s also unable to test resistance at 2,300 ringgit,” a Kuala Lumpur-based trader said. – Reuters

Source: https://www.thestar.com.my/business/business-news/2019/10/22/malaysian-palm-oil-price-snaps-5-session-rally-on-stronger-ringgit#zDLfQHM7KxhzMZGG.99