Palm oil prices drop on Dalian weakness and stronger Ringgit

Malaysian palm-oil futures closed lower on Monday due to a weaker Dalian edible oil and a stronger Ringgit.

The benchmark contract for?palm oi l for February delivery at Bursa Malaysia's Derivatives exchange fell 12 ringgit or 0.3% to 4,006 Ringgit ($979.46), a metric tonne, as of the close.

A Kuala Lumpur based trader stated that "the futures are still trading between 4,000 and 4,100?ringgit tracking Dalian strength and ringgit weakness."

Dalian's most-active palm oil contract fell 0.96%, while the soyoil contract declined 0.95%. Chicago Board of Trade soyoil prices rose 0.12%.

As palm oil competes to gain a market share on the global vegetable oils market, it tracks price changes of rival edible oils.

The Malaysian Ringgit, the palm industry's trade currency, has slightly increased by 0.07% in relation to the U.S. Dollar, making it a little more expensive for holders of foreign currencies.

AmSpec Agri Malaysia, an independent inspection company, reported that exports of palm oil products from Malaysia for the period December 1-15 were down 16.4% compared to a month earlier. Intertek Testing Services reported that exports for the same period fell by 15.9%.

India's palm-oil imports increased in November, as refiners benefited from lower prices. They bought more of the tropical oil and imported less of the "costlier" soyoil, sunflower oil, said a leading industry body on Monday.

Prices of oil rose on Monday, as disruptions in supply linked to the escalating tensions between the U.S. and Venezuela outweighed concerns about oversupply and the potential impact of a Russia-Ukraine deal.

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

(source: Reuters)