Palm oil prices rise but a stronger ringgit and weak demand cap gains
Malaysian palm futures edged higher on Friday, after three sessions of decline. The gains were limited by the stronger ringgit, and weak demand in key markets.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange was up 0.41% to 3,927 Ringgit ($914.53) per metric tonne.
The contract has fallen by 3.6% this week.
Anilkumar bagani, head of commodity research at Mumbai-based Sunvin Group, stated that the return to trading for crude palm oil futures was bullish, after the surge in Chicago energy and soyoil futures overnight.
Bagani stated that the gains were limited by a stronger ringgit, and a lack of enthusiasm in anticipation of a rise in Malaysian palm oil inventories for April.
The Chicago Board of Trade reported a 0.7% increase in soyoil. Dalian Commodity Exchange will be closed for Labour Day from May 1 to 5.
As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.
The oil prices rose in the early Asian hours, after China announced that it was open to talks with the U.S. This raised hopes for a deescalation of the bitter trade war between two of the world's largest economies.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's currency has strengthened by 0.53% compared to the U.S. Dollar, increasing the price of the commodity for buyers who hold foreign currencies.
(source: Reuters)
