Palmettos end higher due to Indonesian output risks and a softer ringgit

Malaysian palm futures closed slightly higher for the third session in a row on Monday, thanks to a weaker ringgit as well as bullish predictions from industry analysts.

The benchmark contract for palm oil delivery in January on the Bursa Derivatives exchange gained 6 ringgit or 0.14% to 4,151 Ringgit ($1,000.72).

A Kuala Lumpur-based broker said that the contract has seen support after bullish presentations made at the Indonesia Palm Oil Conference held last week.

Analysts have warned that palm oil could increase in price over the next few months due to uncertainties arising from land seizure policy and a plan for biodiesel by Indonesia, the top producer.

The ringgit (palm's trade currency) has weakened by 0.44% against dollars, making the commodity more affordable for buyers who hold foreign currencies.

Dalian's palm oil contract, which is the most active contract, gained 0.18% while soyoil prices fell by 0.14%. Chicago Board of Trade soyoil prices were up by 0.28%.

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

Exports of palm oil-based products from Malaysia for the period November 1-15 were estimated to have fallen between 10% and 15% compared to a month ago.

The oil prices dropped, wiping out last week's gains. Loadings at Novorossiysk - the main Russian export hub - resumed after a suspension of two days at the Black Sea Port that was hit by an attack from Ukraine.

Palm oil is less appealing as a biodiesel source due to weaker crude oil futures. ($1 = 4.1480 ringgit)

(source: Reuters)