Palm oil rises but firmer ringgit, weak demand caps gains
Malaysian palm oil futures rose 0.41% to 3,927 ringgit per tonne on Friday, supported by stronger soyoil and crude oil prices. However, gains were limited by a firmer ringgit and weak demand, with the contract still down 3.6% for the week. Market sentiment was also tempered by expectations of rising Malaysian inventories and holiday closures in key Asian markets.
KUALA LUMPUR: Malaysian palm oil futures inched higher on Friday after three sessions of decline, buoyed by stronger Chicago soyoil and crude oil prices, although gains were capped by a firmer ringgit and weak demand from key markets.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.41% at 3,927 ringgit ($914.53) a metric ton by the midday break. However, the contract has lost 3.6% so far this week.
Crude palm oil futures resumed trading after a holiday on a bullish note, following a surge in Chicago soyoil and energy futures overnight and during Asian hours, said Anilkumar Bagani, commodity research head at Mumbai-based brokerage Sunvin Group.
However, a stronger ringgit and absence of enthusiastic buying amidst expectations of an increase in Malaysian April palm oil inventories limited the gains, Bagani said. Soyoil prices on the Chicago Board of Trade were up 0.7%.
The Dalian Commodity Exchange is closed from May 1 to May 5 for the Labour Day holidays. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices pulled ahead in early Asian hours after China said its doors are open for talks with the US, raising hopes of a de-escalation in a bitter trade war between the world’s two largest economies.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.53% against the US dollar, making the commodity more expensive for buyers holding foreign currencies.
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Source : Business Recorder
