Vegoils Palm oil weakens on stronger ringgit, lower demand hopes

by **Cals** Fri 19 Feb 2016, 03:35

Vegoils

[size=28]Palm oil weakens on stronger ringgit, lower demand hopes

By Reuters / Reuters | February 18, 2016 : 6:30 PM MYT

KUALA LUMPUR (Feb 18): Malaysian palm oil futures fell as the ringgit gained over 1% against the dollar on Thursday, and on expectations of weaker export data towards the end of February.

The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.6% at RM2,598 (US$624.52) per tonne in evening trade, ending the day 1.9% lower from its near two-year high of RM2,648 hit on Monday.

Traded volume stood at 42,909 lots of 25 tonnes each.

"It's all ringgit play today, and I expect exports on Feb 20 to come down, but March should see some demand creeping in from the Middle East," said a trader at a brokerage based in Kuala Lumpur.

"They have not been buying much in Jan and Feb so they need to replenish stocks. March is also the onset of summer, so demand will pick up."

The ringgit, the currency palm oil is traded in, hit a session high of 4.1540 per dollar on Thursday, buoyed by Malaysia's better-than-expected gross domestic product data.

A stronger ringgit makes palm oil more expensive for holders of foreign currencies.

Malaysian shipments for the first half of February fell 14%-16% compared with the same period a month ago, according to cargo surveyor data. Exports fell due to weak demand from top palm importers China and India.

Palm oil may retest support at RM2,576 per tonne as its drop from the Feb 15 high of RM2,648 has not finished yet, according to Wang Tao, Reuters market analyst for commodities and energy technicals.

In competing vegetable oil markets, the Chicago soyoil contract lost 0.3%.

Palm, soy and crude oil prices at 1005 GMT

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Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	MAR6	2530	-15.00	2502	2561	468
MY PALM OIL	APR6	2585	-11.00	2565	2609	4107
MY PALM OIL	MAY6	2598	-15.00	2580	2625	22598
CHINA PALM OLEIN	MAY6	5000	+38.00	4986	5050	1054656
CHINA SOYOIL	MAY6	5766	+0.00	5756	5814	420704
CBOT SOY OIL	MAR6	31.90	-2.00	31.75	32.00	8409
INDIA PALM OIL	FEB6	486.80	-2.00	485.50	488.60	652
INDIA SOYOIL	FEB6	618.50	+0.45	618.50	619.50	480
NYMEX CRUDE	MAR6	31.36	+0.70	31.01	31.72	32020

[size]

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel

(US$1 = RM4.1600)
(US$1 = 68.4900 Indian rupees)
(US$1 = 6.5150 Chinese yuan)
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