Palm falls as stronger Ringgit weighs

The price of Malaysian palm oils futures fell on Tuesday due to a strong ringgit. Market participants were waiting for the Malaysian Palm Oil Board's (MPOB) next-day data on demand and inventories.

At closing, the benchmark palm oil contract on Bursa Malaysia's Derivatives Exchange for November delivery fell 7 ringgits, or 0.16% to 4,481 Ringgit ($1,066.40).

A survey shows that Malaysian palm oil inventories will rise for the sixth consecutive month in august, as production continues outpacing exports, despite an improvement in demand.

A Kuala Lumpur based trader stated that "Today CPO Future is tracking moderate movements from Dalian palm oils and strong ringgit, while waiting for tomorrow’s MPOB data to find new leads."

Dalian's palm oil contract, which is the most active contract in Dalian, was up by 0.51%. The Chicago Board of Trade's (CBOT), which trades soyoil, saw a 0.12% increase in prices.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

The oil prices rose on Tuesday as OPEC+ increased production less than the market expected, and concerns about tighter supplies due to new sanctions against Russia also continued to support them.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's trade currency strengthened by 0.31% compared to the dollar. This made the commodity more costly for buyers who hold other currencies.

Technical analyst Wang Tao stated that palm oil could test resistance at 4,506 Ringgit per metric tonne, with a high chance of breaking through it and moving up to 4,568 Ringgit. ($1 = 4.2020 ringgit)

(source: Reuters)