Palm oil prices rise on the back of a weaker ringgit and Chicago soyoil price strength

Malaysian palm oil futures rose on Wednesday due to a softer ringgit and the stronger soyoils traded in Chicago.

By midday, the benchmark palm oil contract for May delivery on the?Bursa Derivatives exchange had gained 32 ringgit or 0.72% to 4,460 Ringgit ($1,137.46). It had fallen to 4,395 earlier in the day.

Analysts in Singapore said that palm oil futures were trading higher, primarily due to a weaker ringgit and some spillover strength coming from the oilseed complex. They also tracked gains made by Chicago soyoils at Asian hours.

He added that the upward momentum is still tempered by global supply concerns.

Chicago Board of Trade Soyoil rose by 2.04%. Dalian's soyoil contract, which is the most active one, was up 0.02% after dropping 0.19% in morning trade. Its palm oil contract gained 0.38% following a 0.25% drop.

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

The Malaysian Ringgit, which is the currency of the contract, has eased by 0.03% against U.S. dollars, making palm oil more affordable for holders of foreign currencies.

The oil prices dropped further on Wednesday as the International Energy Agency proposed the largest release of reserves in its history. This was due to concerns about potential supply disruptions resulting from the 'U.S. - Israel conflict with 'Iran.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

AmSpec Agri Malaysia, an independent inspection company, reported that exports of palm oil products from Malaysia rose 45.3% between February 1-10. Intertek Testing Services reported a?37.9% increase.

Indian buyers are urged to expedite shipments by rising vegetable oil prices, and freight rates. They fear that the Middle East conflict could delay deliveries of soyoil or sunflower oil they have recently purchased.

(source: Reuters)