Palm oil prices rise on the back of a weaker ringgit

Malaysian palm futures edged higher on Monday, after two straight sessions of losses. A weaker ringgit made the vegetable oil more affordable for holders of foreign currencies.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for March delivery gained 8 ringgit (0.2%), or $881.83 per metric ton. Last week, the contract fell by 2.42%.

Anilkumar bagani, head of commodity research at Sunvin Group in Mumbai, said that "Bursa Malaysia CPO futures opened higher this morning, following gains made by Chicago soyoil Friday, and early Asian hours. This was coupled with the weaker ringgit, and a glimpse of renewed demand coming from India," he added.

He said that the price gains were capped by expectations of increased palm oil stocks in Malaysia at 2025's end.

Dalian's palm oil contract dropped 1.14%, but its most active soyoil contract remained unchanged. After early gains, soyoil prices at the Chicago Board of Trade fell 0.06%.

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

The palm oil currency, the ringgit, has weakened by 0.52% in relation to the U.S. Dollar.

Investors weighed the impact of U.S. action in Venezuela on oil prices and Asian stocks as they prepared for a week packed with economic data releases in the first trading week of 2019.

Technical analyst Wang Tao stated that palm oil could test support at 3,964 ringgit a ton. A break below this level would trigger a drop into the range of 3,894-3.937 ringgit.

(source: Reuters)