Palm oil prices fall on stronger Ringgit; traders are cautious about high premiums against rival oils
The price of palm oil in Malaysia fell for the second session on Monday, as a result of a stronger Ringgit. Traders remained cautious, however, because palm is still priced higher than other oils.
The benchmark palm-oil contract for December delivery at the Bursa Derivatives exchange was down 21 Ringgit or 0.52% during the midday lunch break, to 4,030 Ringgit ($982.21) per metric ton.
Paramalingam Supramaniam said that palm prices were too high in comparison to other oils. They need to be brought down to the level of rivals to ensure that palm can compete in 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 0.49% 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 by 1.19%. Chicago Board of Trade soyoil fell by 0.4%.
As they compete to gain a share in the global vegetable oil market, palm oil monitors prices of competing edible oils.
Technical analyst Wang Tao stated that palm oil could test support at 4,017 Ringgit per metric tonne. A break below this level would open the door to the range of 3,928-3981 ringgit.
(source: Reuters)
