Palm falls for second session due to stronger Ringgit, but still posts monthly gains
The Malaysian palm futures market ended the month in a positive mood, but on Monday it declined, the second session in a row of losses. A stronger ringgit dampened the mood, and traders were cautious, as palm oil continues to be valued at a premium compared to other oils.
At the close, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery was down 53 Ringgit (1.31%) to 3,998 Ringgit ($970.15) per metric ton.
The contract gained 0.53% for September despite losing 3.71% over the last two sessions.
Paramalingam Supramaniam is a director of Selangor brokerage Pelindung Bestari. He said that palm prices are too high in comparison to other oils. They need to lower their prices to be competitive on the market.
He said that "Palm oil prices are rising and investors are waiting for lower prices because rival oils are experiencing price changes as well."
Prices are being pushed down by a stronger Dalian Commodity Exchange, as well as the closure of DCE for the holiday season.
From Oct. 1-7, the DCE will be closed during China's Golden Week holidays.
The palm ringgit's currency has strengthened by 0.02% against U.S. dollars, increasing the price of the commodity for buyers who hold foreign currencies.
Dalian's palm oil contract, which is the most active contract, fell 0.3% while soyoil prices dropped 0.02%. Chicago Board of Trade soyoil prices fell by 0.09%.
As they compete to gain a share in the global vegetable oil market, palm oil monitors prices of competing edible oils.
Exports of palm oil products from Malaysia rose between 0.8% to 1.1%, according to cargo surveyors. Reporting by Ashley Tang, Editing by Sumana Nandy and Tasim Zaid.
(source: Reuters)
