Palm oil prices rise in line with Dalian competitors; stronger Ringgit limits the upside
Malaysian palm futures continued to rise for the fourth consecutive session on Wednesday. They took their cues from higher vegetable oil prices at the Dalian exchange. However, a stronger ringgit curtailed its gains.
The benchmark contract for palm oil delivery in July on the Bursa Derivatives Market closed 32 ringgit higher or 0.82% at 3,925 ringgit (915.99 USD) per metric ton.
A Kuala Lumpur based trader said that palm futures prices were higher due to the spread adjustment against competing vegetable oils. He added that bargain-buying activities had also helped prices.
Dalian's palm oil contract for delivery in September grew by 2.17%, while the most active soyoil contract rose by 1.15%. Soyoil prices at the Chicago Board of Trade (CBOT), however, fell 0.6%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the prices for rival edible oils.
The palm ringgit's currency gained 0.81% versus the U.S. Dollar during the early trading on Wednesday. This made the commodity more costly for buyers who hold foreign currencies.
Indonesia, the world's largest exporter of palm oil, will increase its crude palm (CPO), export levy from 7.5% to 10% starting May 17 to fund its increased biodiesel blend mandate.
The data released by the industry regulator on Tuesday showed that Malaysian palm oil stocks reached a six-month high in April, as production reached a decade-high level for the month. However, local consumption fell. ($1 = 4.2850 ringgit)
(source: Reuters)
