VEGOILS-Palm oil dips on firmer ringgit but stronger rival oils cap losses
KUALA LUMPUR/SINGAPORE, March 7 (Reuters) – Malaysian palm oil futures fell on Thursday after hitting its highest closing price in more than seven months in the previous session, weighed down by a firmer ringgit, although strength in rival edible oils capped losses.
The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange was down 10 ringgit, or 0.25% at 4,071 ringgit ($865.80) per metric ton at closing, logging a two-day low.
The contract rose 2.38% a day ago, its biggest daily gain in nearly four months, fuelled by tight supply and optimism over palm demand.
“The recent firm footing of palm oil premiums in both Malaysia and Indonesia is reflective of a short-term supply contraction as we transition through the monsoon period,” said Marcello Cultrera, director at commodities consultancy Apricus 8 Pte Ltd.
Minor restocking across various importers also contributed to the uptick in pricing dynamics, Cultrera added.
Nonetheless, strength in the ringgit capped Malaysian palm oil futures upside, said a Kuala Lumpur-based trader.
The ringgit MYR= rose 0.6% against the U.S. dollar as at 1000 GMT, as the Bank Negara Malaysia (BNM) kept its benchmark interest rate unchanged as anticipated. FRX/
A stronger ringgit makes palm oil less attractive for foreign currency holders.
The soyoil contract on the Dalian Commodity Exchange DBYcv1 gained 0.45%, while its palm oil contract DCPcv1edged up 1%. Meanwhile, soyoil prices on the Chicago Board of Trade BOc2increased 0.44%.
Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.
Malaysia’s palm oil stocks are expected to drop below 2 million tons for the first time in six months at the end of February, with output likely to drop for a fourth consecutive month, a Reuters survey showed on Monday.
India’s palm oil imports in February previously plunged to their lowest levels in nine months, five dealers told Reuters on Tuesday.
China’s palm olein import this year could drop if palm’s premium over soybean oil continues.
($1 = 4.7020 ringgit)
(Reporting by Bernadette Christina, Danial Azhar and Cassandra Yap; Editing by Janane Venkatraman, Sohini Goswami and Sonia Cheema )
Source Link: https://www.nasdaq.com/articles/vegoils-palm-oil-dips-on-firmer-ringgit-but-stronger-rival-oils-cap-losses
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