Palm extends its fall on weaker Chicago Soyoil and firmer Ringgit
The 'Malaysian Palm Oil Futures' fell for the?second consecutive session on Thursday. This was due to a weaker Chicago soyoil and a stronger ringgit, as well as expectations of a higher production in April.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange fell 20 ringgit or 0.44% to 4,559 Ringgit ($1,166.88).
Anilkumar?Bagani, head of commodity research at Mumbai-based Sunvin Group, explained that the market had traded lower after a "long liquidation" in Chicago soyoil.
He said that a stronger Malaysian Ringgit, increased production in April, and palm oil's narrowing of its discount to gas oil all contributed to the decline.
According to a survey conducted?last week, Malaysian palm oil exports and inventories likely declined in April while production was expected have risen.
On May 11, the Malaysian Palm Oil Board will release its monthly data on supply and demand.
Dalian's palm oil contract fell by 1.48%, while the most active soyoil contract dropped 1.14%. Chicago Board of Trade soyoil prices were down 0.32%.
As it competes to gain a share in the global vegetable oil market, palm oil closely tracks the price fluctuations of competing?edible oils.
The palm ringgit's currency has risen 0.33% in value against the dollar. This makes the product more expensive for foreign buyers.
Analyst Dorab Mistry predicted that Malaysian palm oil will rise by 12%, to 5,200 ringgit (1,316 dollars) a tonne, by mid-July. This is due to the higher 'energy prices caused by the U.S./Israeli war against Iran, which are driving up biodiesel prices and tightening supplies.
(source: Reuters)
