Palm increases but logs second weekly loss
The price of Malaysian palm oils futures rose on Friday due to a weaker Ringgit and a U.S. tariff reduction on Malaysian goods. However, the contract recorded its second consecutive weekly decline.
The benchmark contract for palm oil delivery in October on the Bursa Derivatives Exchange rose 15 ringgit or 0.35% to 4,245 Ringgit ($992.98) per metric ton.
Anilkumar bagani, Sunvin Group's research head, says that a rebound in South American soybean oil and a weaker Ringgit have helped to recover prices from their initial setback. The reduction of U.S. Tariffs on Malaysian Goods from 25% to 19% has also removed some bearishness.
Paramalingam Supramaniam is the director of brokerage Pelindung Bestari. He said that market participants are awaiting July's production and export figures. Once these numbers are released, a more accurate picture will be painted about market trends.
Malaysia's production is better than expected in July. Exports are still very low, but we expect ending stock to be above 2.1 millions tons in July," Supramaniam said.
According to cargo surveyors, palm oil exports dropped between 6.7% and 9,6% in July.
On August 11, the Malaysian Palm Oil Board will release its July demand and supply data.
Dalian's soyoil contract with the highest volume rose by 0.83% while palm oil contracts fell by 0.02%. Chicago Board of Trade soyoil prices were down by 0.47%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.
The palm ringgit's trade currency, the dollar, has weakened by 0.35%, making the commodity more affordable for buyers who hold foreign currencies.
Investors weighed up the impact of additional tariffs and sanctions imposed by U.S. president Donald Trump.
Palm oil is less appealing as a biodiesel source due to weaker crude oil futures. $1 = 4.2750 Ringgit (Reporting and editing by Ashley Tang, Eileen Soreng, and Vijay Kishore).
(source: Reuters)
